Whole Foods is the Top Grocery Advertiser in the U.S.
Recent reports say that Amazon is preparing to open dozens of physical grocery stores in the U.S., starting in Los Angeles in late 2019. What effect Amazon’s grocery initiative will have on the grocery industry remains to be seen, of course, but Kantar found the company is already having an impact in grocery via Whole Foods, which it acquired in 2017.
Specifically, Kantar data shows Whole Foods was the #1 grocery advertiser in the U.S. in the second quarter of 2019, with an estimated $18 million in ad expenditure. Kroger ranked second with $15 million in ad spend, while Publix ranked third with $10.3 million.
To put these findings into perspective, Whole Foods is a far smaller company than the top national and regional grocery chains that it’s greatly outspending; Whole Foods operates less than 500 stores in the U.S. while Kroger has nearly 2500 stores and Publix offers some 1200 locations in the Southeastern U.S. Walmart, the largest grocery retailer in the U.S. with more than 4,000 stores, ranked fourth with $8.6 million in ad spend.
It wasn’t always this way. In fact, Whole Foods ranked 10th in ad spend in Q2 2016 (prior to its acquisition by Amazon) with $4.3 million spent, according to Kantar data, and has been trending up since.
While this data suggests Amazon is making a concerted effort to gain market share in the grocery category via Whole Foods, Amazon’s own grocery-related advertising has been declining according to Kantar estimates. Kantar data shows Amazon spent $150,000 to promote its grocery offering (currently centered on online delivery) in Q2 2019—a 66% decrease from $445,000 it spent in Q2 2017.
We expect to see Amazon’s advertising evolve as its grocery plans take shape over the next year or two. As always, Kantar will be monitoring to assess the effect on both Amazon and the grocery category at large.