During Amazon’s recent third-quarter earnings call, Chief Executive Officer Andy Jassy dedicated significant time to discussing the company’s cloud computing division, Amazon Web Services, and its expanding artificial intelligence investments. However, even as Wall Street analysts and tech commentators fixated on these high-margin technology segments, Jassy took deliberate care to emphasize the quiet yet substantial progress unfolding within Amazon’s foundational retail store and e-commerce operations.
According to the company’s financial release for the third quarter of 2026, Amazon’s online store net sales grew by 2% year over year, reaching $68.5 billion. Simultaneously, the company’s physical store net sales increased at the exact same rate, climbing to $5.7 billion. While a 2% growth rate might appear modest compared to the explosive expansion seen in emerging tech sectors, Jassy argued that the sheer scale, profitability, and strategic evolution of Amazon’s retail business deserve far more recognition than they typically receive.
Addressing participants on the analyst call, Jassy pushed back against perceptions that the retail arm has plateaued or taken a back seat to the company’s flashier technology ventures. In stores, he noted, some observers are sleeping a bit on how much progress that business has made and what it has truly become over the last few years. Jassy pointed out that he is not aware of another retail enterprise approaching Amazon’s revenue size—encompassing hundreds of billions of dollars—that maintains double-digit operating margins inclusive of advertising, all while continuing to grow at this particular pace.
A key driver behind this retail momentum is Amazon’s aggressive push into perishable goods and daily necessities. The executive highlighted that fresh groceries and everyday essentials grew at a rate three times faster than the rest of the store business during the quarter. This performance is largely anchored in customer shopping behavior, particularly the finding that shoppers who purchase perishable items through same-day delivery services tend to buy nearly seven times more essential units than those who do not engage with these fast-fulfillment grocery options.
This behavioral trend represents a vital strategic transition for the e-commerce titan. GlobalData Managing Director Neil Saunders elaborated on this dynamic in emailed commentary following the earnings release, pointing out that this shift is crucially important because it allows Amazon to successfully capture market share in a category defined by regularity and repetition. Saunders noted that this habit-forming purchasing behavior makes Amazon customers significantly stickier, renders the company’s complex fulfillment and logistics network more efficient, and ultimately improves consumer perceptions regarding the value of Prime memberships and other bundled services.
Compounding the baseline quarterly figures, Amazon’s year-over-year e-commerce comparisons faced unique headwinds due to internal scheduling adjustments. Earlier in the year, the company made the strategic decision to shift its blockbuster Prime Day shopping event from the third quarter to the second quarter. Consequently, the immediate retail sales lift and associated advertising revenue benefits from that massive commercial event fell outside of the third quarter window, making the Q3 year-over-year comparison notably tougher for analysts to evaluate at face value.
Despite these timing shifts, digital shopping tools are successfully driving higher customer spending values ahead of the critical holiday shopping season. Alexa for Shopping, an integrated conversational tool that expanded its capabilities this week, is steadily gaining traction and seeing increased usage frequency among everyday Amazon shoppers. Jassy shared compelling data with analysts on the call, revealing that U.S. customers who actively utilize Alexa for Shopping are spending roughly 50% more per order compared to those who do not engage with the assistant. Looking forward, Jassy expressed confidence in the platform’s trajectory, stating that while Amazon anticipates working with various horizontal AI agents, he firmly believes Alexa for Shopping will ultimately serve as the primary shopping agent that customers utilize when navigating the Amazon marketplace.
The retail division’s ongoing evolution has not been without internal friction, however. Earlier in the month, the e-commerce giant implemented workforce reductions within its retail division, resulting in job cuts that impacted hundreds of employees. A company spokesperson explained in a statement at the time that the adjustments were part of a broader corporate restructuring designed to realign parts of the store business and create an operational framework that will better enable the organization to deliver on its core strategic priorities.
Even with structural adjustments and shifting macroeconomic conditions, financial analysts remain optimistic about the company’s long-term competitive position. Analysts from Telsey Advisory Group noted in a research note that Amazon’s overall retail market share has the potential to continue expanding over the long term, provided the company effectively leverages its massive, highly engaged Prime member base.
Furthermore, the Telsey analysts emphasized that Amazon’s demonstrated ability to continually fund and fuel its key growth engines—encompassing grocery expansion, pharmacy services, logistics optimization, high-margin advertising, and advanced artificial intelligence and technological infrastructure—should collectively serve to make the overall enterprise increasingly valuable to consumers, partners, and investors alike as the business pushes deeper into the future.