Amazon Posts Double Digit Sales Growth Following Whole Foods Deal
Online retail giant Amazon has reported that net sales increased by 34% to $43.7 billion in the third quarter of the year.
This figure includes $1.3 billion in sales from US organic grocery chain Whole Foods Market, which Amazon acquired in August following a $13.7 billion deal.
Operating income decreased by 40% to $347 million in the third quarter, however, net income rose to $256 million, or $0.52 per diluted share.
Looking forward, the company expects net sales in the fourth quarter to be between $56 billion and $60.5 billion, representing growth of between 28% and 38% compared compared to the same period last year.
This guidance includes growth from the Whole Foods business and favourable foreign exchange rates.
Aside from the company's takeover of Whole Foods, which has shaken the grocery industry on both sides of the Atlantic, Amazon has made a number of new developments in the most recent quarter.
In terms of its own technology, Amazon has introduced three new Echo devices, five new Alexa-enabled devices, the new Fire TV, Fire HD 10 tablet, and the new Kindle Oasis.
"Customers have purchased tens of millions of Alexa-enabled devices, given Echo devices over 100,000 5-star reviews, and active customers are up more than five times since the same time last year," said Jeff Bezos, Amazon founder and CEO.
"With thousands of developers and hardware makers building new Alexa skills and devices, the Alexa experience will continue to get even better.”
Earlier this week, the online retailer also announced the launch of Amazon Key, which will allow orders to be delivered directly into customers' homes with a smartlock monitoring system.
Speaking about Amazon's performance, Ray Gaul, vice president of Kantar Retail, said that these are "record-breaking results", which have significant implications for the retail industry.
"Never, in the history of mass retailing, has one retailer done so much to change the way shoppers think in such a short period of time as what Amazon accomplished over the past few months."
"Not only did the platform giant launch the most popular piece of technology of the past five years – the two-way speaker called Echo with its built-in companion, ‘Alexa’ – but they also acquired the world’s most successful organic grocer, Whole Foods."
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.