Amazon (AMZN) is shifting its retail focus toward everyday essentials, which saw nearly double the growth of other categories in the U.S. in 2025, accounting for one out of every three units sold. Same-day grocery delivery has expanded to over 2,300 U.S. cities, with perishables representing nine of the top ten most ordered items. Amazon plans to open over 100 new Whole Foods Market stores and is piloting its rapid delivery service, Amazon Now, in select U.S. and U.K. markets after launching in India, Mexico, and the UAE.
Despite these initiatives, scaling perishables logistics and maintaining competitive pricing are expected to pressure Amazon’s near-term margins. The company’s first-quarter 2026 operating income is projected between $16.5 billion and $21.5 billion, down from $18.4 billion in the same quarter of 2025, as it navigates the costs associated with enhancing its grocery offerings. The Zacks Consensus Estimate anticipates North America revenues of $101.77 billion in Q1 2026, reflecting a year-over-year growth of 9.57%.
Amazon faces significant competition from Walmart and Costco, both of which leverage their strong pricing and store locations to drive repeat grocery demand. As of now, Amazon shares have increased by 7.3% year-to-date, outpacing the Zacks Internet – Commerce industry growth of 2.5% and the Retail-Wholesale sector’s growth of 4.4%. The company’s valuation currently stands at a forward price/earnings ratio of 30.22, compared to the industry average of 24.95.
