Amazon is expanding its same-day fresh food delivery service to over 1,000 U.S. cities and towns, with plans to reach at least 2,300 locations by year’s end. The expansion targets areas such as Raleigh, North Carolina, Tampa, Florida, and Milwaukee. Initially tested in Phoenix in 2023, the service showed that shoppers often added perishables like strawberries, bananas, and avocados to their orders. Amazon noted that many were first-time grocery customers who returned twice as often compared to those not buying fresh items.
According to CNBC, the service is free for Amazon Prime members on orders over $25, with a $2.99 fee for smaller orders. Non-Prime customers pay $12.99 regardless of order size. The move has disrupted the grocery delivery market, with stocks of Instacart, Kroger, Albertsons, DoorDash, and Walmart all dropping following the announcement. Analysts from Mizuho see this as a direct escalation of competition between Amazon and Walmart, with Amazon focusing on grocery and rural markets while Walmart boosts its marketplace and advertising.
Amazon has been overhauling its grocery operations in recent years, revamping its Fresh grocery stores to attract more shoppers and extending fresh food delivery to non-Prime customers. The company has also emphasized sales of household staples like paper towels, cleaning supplies, bottled drinks, and canned goods.
Leadership changes have accompanied this strategic push. In January, Amazon appointed Jason Buechel, CEO of Whole Foods Market, to head its worldwide grocery stores business. Whole Foods, acquired by Amazon in 2017 for $13.7 billion, had largely operated independently until a June reorganization brought it closer under Amazon’s grocery umbrella.
The expansion of same-day fresh food delivery positions Amazon to further integrate groceries into its e-commerce ecosystem, increasing customer frequency and reinforcing its competitive stance against major grocery and delivery players.
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