Amazon's $5.7 billion store quarter is the small part of its retail push

Amazon reported $5.7 billion in physical store net sales for the third quarter of 2026, up 2% year over year. On Amazon's third-quarter earnings call, CEO Andy Jassy told analysts that "some folks are sleeping a bit on how much progress that business has made," according to Digital Commerce 360.

The figures point somewhere a little different from the remark. For a grocery chain or mass merchant deciding how to plan against Amazon, that difference decides the response: match a store format, or match a delivery promise. Most of the evidence in Amazon's own results points to the second.

Which stores Jassy was talking about

The supporting numbers Jassy gave, in the call excerpts published by Brian Warmoth at Digital Commerce 360, were big. Units grew nearly 15% year to date on a base of more than 30 billion items sold last year. He said Amazon added more than $90 billion in gross sales in the trailing 12 months. And he said he knew of no other retailer near Amazon's size, hundreds of billions of dollars, growing at this pace with double-digit operating margins once ads are included.

Those numbers can't describe the physical stores alone. At $5.7 billion a quarter, that line comes to roughly $23 billion a year on simple annualizing, far short of hundreds of billions. Inside Amazon, "stores" means the whole retail business. Retail Brew's breakdown of Amazon's physical retail business cited 15% unit growth year to date and $90 billion in added gross sales over 12 months. Read against a 30-billion-item base, they describe the entire operation.

Physical stores grew at the same rate online stores did. The margin story Jassy pointed to is real, but it belongs to the retail business as a whole. Amazon's release shows North America operating income of $8.7 billion against $4.8 billion a year earlier, and a company-wide operating margin of 13.9%, its highest ever.

Nine years measured from a five-week start

GeekWire's Taylor Soper covered the first breakout in October 2017: $1.27 billion in physical store sales for that year's third quarter. Olsavsky said the figure was mostly Whole Foods sales from August 28, when the $13.7 billion acquisition closed, through the end of the quarter, plus Amazon's bookstores. At the time, that meant 465 Whole Foods stores and about a dozen bookstores.

Retail Brew notes that going from about $1.3 billion to $5.7 billion more than quadruples physical store sales in nine years. Look at the dates, though. Amazon CFO Brian Olsavsky said the 2017 figure was primarily made up of Whole Foods sales between Aug. 28, when Amazon completed the acquisition, and the end of the quarter, according to GeekWire. That suggests the like-for-like growth is smaller than the multiple implies. Anyone putting Amazon's store growth in a board deck should start from a full-quarter baseline.

For scale, Retail Brew puts Walmart US physical store sales at roughly $96 billion in its second quarter, while Walmart's global e-commerce sales rose 23%. The quarters don't line up, so take it as a sense of size, not a growth comparison. Even so, Amazon's whole quarterly store line is a small fraction of what Walmart's US stores bring in.

Read the 2% growth with one adjustment in mind. Amazon's release says Prime Day landed in the second quarter for most large countries in 2026, after falling entirely in Q3 in 2025, and that total third-quarter growth would have been about 400 basis points higher without the shift. The release doesn't split that effect by segment. Online stores, where Prime Day orders are booked, are the obvious place it shows up. That makes the flat 2% for online stores partly a calendar effect, and it leaves the physical line's underlying pace less certain.

Where grocers meet Amazon

Jassy's own framing of the opportunity explains why the physical line stays modest. He told analysts nearly 80% of retail still happens in physical stores, and he described Amazon's job as helping that spending move online by building out a fast, efficient fulfillment network. U.S. Census Bureau data roughly backs up the split. Second-quarter 2026 e-commerce sales came to $340.2 billion, seasonally adjusted, out of $1,986.5 billion in total retail. That's about 17% by simple division. E-commerce grew 12.2% year over year, against 6.7% for retail overall.

Those are the categories that bring shoppers into supermarkets and drugstores. Groceries and everyday essentials were about half of the units Amazon sold in Q3 while its physical stores grew 2%, a sign the grocery push is running mostly through delivery. Under Olsavsky's definition, every one of those delivered baskets counts as online revenue, even when it competes directly with a trip to the store.

In practice, that means two separate measurements. The physical-store figure tracks the Whole Foods-style competition: aisles, prices, store locations. Same-day coverage tracks the competition for the routine weekly basket. For operators in trade areas where Amazon Now already runs, the second matters more, and it never shows up in the store line. Merging the two into one "Amazon stores" number hides which one is actually reaching a chain's shoppers.

Fewer formats, and a test in Chicago

Amazon is still reshaping its physical footprint, and that is the strongest case against reading the store line as an afterthought. Earlier this year, Amazon announced plans to shutter brick and mortar chains Amazon Go and Amazon Fresh, as it converted a number of these locations into Whole Foods Markets, according to Retail Brew. Amazon is also reportedly experimenting with a big-box format in the Chicago suburbs, though the business model for that store type remains unclear. If the conversions add volume to Whole Foods, the physical line could start to outgrow online stores.

Competitors have already shown that stores can win traffic on Amazon's calendar. Placer.ai foot-traffic data, reported by Bill Wilson at Supermarket News, showed Target visits running 16.3% above its year-to-date average for that day of the week on the first day of Prime Day, June 23, with Walmart up 4.7%. Both chains ran promotions against the event. With Prime Day moved from last year's July 8-11 window into June, that traffic contest moved into the second quarter too. Store planners who key promotions to Amazon's event dates should plan around the new slot.

The next data point has a date. The Census Bureau's third-quarter 2026 Quarterly E-commerce Sales release is scheduled for November 19 at 10:00 a.m. EDT. If online share keeps climbing in that release while the Whole Foods conversions work through Amazon's store line, the read here holds. If the store line breaks away from 2% first, Jassy's "sleeping" comment will have been the more literal one.