As a result of the spike, Amazon has increased its grocery delivery capacity by over 160% to better meet demand.
- Amazon saw an explosion in online grocery delivery sales thanks to the coronavirus pandemic.
- Online grocery sales tripled year over year in the company's second quarter.
- Amazon has responded by tripling the number of its grocery pickup locations.
- The spike in online grocery shopping is largely driven by Prime subscribers who are ordering more products from the online retailer.
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Amazon' online grocery sales tripled in the second quarter as a result of stay-at-home orders and COVID-19 fears.
In the online retail giant's second quarter earnings call on Thursday, company executives explained that Amazon has seen a surge in online grocery sales compared to the previous year. And they largely credit changes to consumer behavior brought about by the coronavirus pandemic.
Amazon is doubling down on this trend, having just boosted its grocery delivery capacity by 160%. Amazon has also established triple its grocery pickup locations. In a statement released with Thursday's earnings report, company representatives wrote that this expansion happened in order to better help Amazon "support customers during COVID-19."
Amazon, which also owns the Whole Foods chain of grocery stores, did not disclose the actual amount of its online grocery revenues, saying only that the sales were three times the level in the same period a year ago.
Amazon Chief Financial Officer Brian Olsavsky spoke to analysts at the top of the call, describing how "Prime members shop more often with larger basket size" since the springtime. He said that Prime subscribers are driving much of the "super high" grocery demand.
As the coronavirus morphed into a global pandemic in March, Amazon began to see strong early demand in categories like grocery, consumables, as well as in safety items such as masks, facial coverings, gloves, and hand sanitizer. This surge in sales was largely balanced out by soaring COVID-19 labor and safety costs.
By May, Olsavsky said that the online retailer began seeing a more "normal mix" in terms of consumers' baskets. But there is still a strong demand for online grocery delivery, as COVID-19 fears endure.
"We know that people are relying on online shopping more than ever," Olsavsky said.