Dive Brief:

• Amazon Prime Day last week was the company’s largest promotional event in four years, generating an estimated $4.2 billion in sales in 36 hours. Amazon, which doesn’t provide revenue numbers for the day, said it shipped more than 100 million products in the first 24 of the event. This occurred despite some technical glitches, according to Bloomberg. 
• This was the first year Amazon’s Prime Day included a dedicated grocery focus, and the company featured a number of promotions from its Whole Foods partner. According to Feedvisor, sales of groceries via Amazon on Prime Day were up 25%. 
• Despite this jump, Kroger, the largest brick-and-mortar grocer in the country, released a statement noting that it generates sales of about 110 million items on an average day. “It’s easy to take for granted the scale of a company like Kroger,” the retailer said in a statement. 

Dive Insight:

Amazon’s Prime Day is a big deal for the company, generating record sales and memberships. However, its grocery component this year failed to elicit much anxiety from Kroger, which perhaps means Amazon’s predicted threat in this category is some ways off or even overblown. 

Kroger hasn’t sweated much since the Whole Foods/Amazon hookup. Not long after the acquisition, Kroger generated better-than-expected earnings and elevated stock prices. The grocery giant has a bounce in its step once again following Prime Day, given the fact that it sells more products than the e-commerce titan on an average day, without the promotional bells and whistles of the Prime Day undertaking. 

Still, Prime Day underscored the differences between the two companies. Amazon’s core continues to be technology — its highest selling items during the day were the Fire TV Stick with Alexa Voice Remote and the Echo Dog. Accordingly, Amazon is estimated to have generated $4.2 billion on Prime Day. Kroger’s average daily revenues are $340 million. As for the Whole Foods/grocery piece, Amazon said one of the best-selling items was organic strawberries — not necessarily a major differentiator in the category. 

That doesn’t mean the lines won’t continue to blur between the e-commerce titan and brick-and-mortar players, however. Amazon has some work to do to get its customers to think of it as a food retailer while convincing people to think of Whole Foods as a primary grocer as opposed to a “whole paycheck" destination. But the company is investing heavily in lowering prices and expanding its Prime loyalty program, which is a step in that direction.

Kroger, however, appears to be well positioned against a potential threat as shoppers increasingly demand convenience-driven services like e-commerce and delivery — traditionally Amazon’s core competencies. Kroger’s ClickList rollout has made the company one of the leading e-commerce providers in the grocery industry, while its recent partnership with Ocado is further solidifying the company’s digital and robotics capabilities. The Cincinnati-based grocer also recently expanded its delivery partnership with Instacart and has a strong presence in private label, which is responsible for about 26% of dollar sales.

As CEO Rodney McMullen said during Kroger’s earnings call in June, “We believe the future of retail will include both physical and digital customer experiences. Everything we are doing today will enhance our ability to provide everyone in America with convenience of shopping for anything, anytime, anywhere.” 

Kroger is quickly adopting the digital piece and Amazon has the resources and infrastructure to catch up on the physical side, so this race should continue to intrigue. For now, Kroger seems comfortable with its one advantage — the grocery experience.