To which margin are you referring when you cite 20% for the grocery biz? It looks like Kroger’s gross profit margin (Cost of Goods Sold / Revenue) is right about there. The bottom line is closer to 1-2%.
Grocery chains (generally speaking) operate in a highly competitive monopolistic competition environment. So they tend not to be able to be price setters except to the extent that products that are otherwise “substitutable” can be differentiated in some way; the grocery retailer itself still does not have a great deal of pricing power there, though, even when in-house private labeling is considered. The elasticity of demand is simply too high for such consumer goods (again generally considering what’s in your grocery cart).
Regarding Amazon, their net income (aka earnings, “bottom line”) is quite low given the revenue they drive. Most of what would be earnings is eaten up by R&D from what I’ve been told and is consistent with the news we read about Amazon’s exploration of new products/services as well as other investments for growth.
I think Walmart is doing it in certain areas, too. They haven’t expanded nationally, the way Loblaws has (and I am not sure if all Loblaws’ brands do it: Superstore is a yes, but I don’t know about No Frills). I haven’t used it myself, but I have been tempted.
Do they also do flu shots?
I’ve used it - basically, you place your order online and select a pickup time. 30-60 mins before pickup, your “shopper” will call you about any substitutions & expiry dates on perishables. When you arrive you pull into a dedicated spot, and they bring out your groceries, already packed. Pick-up is maybe five minutes tops.
Great service. 
They started doing this a few months back at the supermarket near my parents. They said that first it was a novelty, then it started getting more popular, and now they’re a bit intimidated to actually go into the grocery store, because “every aisle has employees running down it, grabbing things for pickup boxes” because the entire neighborhood uses it. It quickly became more popular than actually going to the store yourself.
So, to bring this back on topic, Amazon is actually trialling this in Seattle apparently, with a grocery store only employees can enter:
I was referring to gross margin, yeah.
That’s the point I was making. But to respond to the rest of your post: Amazon may not act like a typical grocer. They have a lot of pricing power that comes simply from being the 4th largest company in the world.
What do you do about veggies that just aren’t right? Bruised bananas, wilted green onions, etc? Items that you wouldn’t notice until home and in for the night or day. Things that one would usually pick based on experience now is left to the unknown and is tricky for a cook who who wants the best available product.
I used to use the Peapod delivery service with my local market, and if I found lousy vegetables/fruit or moldy bread, they were very good about refunding things.
What didn’t work well for me was when items I ordered would be out of stock; even though they were supposed to either text me to ask if substitutions were OK, most of the time I’d just get a note saying “OUT OF ASPARAGUS, SUBSTITUTED BROCCOLI”.
So, if one needs the best ingredients for say preparing a dinner party etc. it’s best to shop for one’s self otherwise the drive thru is just fine. Cool. I look forward to trying it out.
Well, that’s what’s nice about having a dedicated “pocket” call you - you can tell them you need highest quality X and they verify parishables export dates are acceptable before purchase. That, along with a great no questions asked refund system help.
Don’t we all. Some of us are… less successful than others. 
I still occasionally break down and splurge on certain food items but for the most part i avoid buying candy, snacks, etc. I don’t have much of a sweet tooth so it usually works fine for me.
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