Amazon.com Adds Groceries to Its Selection of Products

Amazon.com Inc. said Thursday that it had begun selling groceries to lure shoppers after profit fell last year.

The online grocery store sells 15,000 nonperishable items in bulk, including diapers, spokeswoman Tracy Ogden said. The products, which also include rice and detergent, will be shipped free if customers order at least $25 of goods.

Amazon.com, which began as a bookseller, has added jewelry, apparel and plants to its product selection as part of Chief Executive Jeff Bezos’ strategy to make it a one-stop shop to increase traffic and revenue and lure customers to buy other, more profitable products. Earnings have fallen for five straight quarters as Amazon.com’s spending increased.

“These grocery items are a loss leader to get people to Amazon,” said Tim Ghriskey of Solaris Asset Management of Bedford Hills, N.Y. “It’s part of their strategy to generate revenue, but there’s still no evidence increased revenue means increased profit.”

Amazon.com’s grocery business will compete against Royal Ahold’s Peapod, the largest Internet grocer in the U.S., as well as privately held FreshDirect.

Several online grocers have failed in the past. Webvan Group Inc. filed for bankruptcy protection in 2001, and some grocery chains have scaled back their online operations.

Amazon.com will own inventories for the grocery items, Ogden said.

The company has sold gourmet food through third-party merchants and energy bars and drinks through its health and personal-care business since 2003, she said.

Amazon.com shares rose $1.28, or 3.8%, to $34.96.