Amazon Inc has launched same-day delivery for perishable food items, allowing Prime subscribers to receive groceries such as strawberries, milk, meats, and frozen dinners within hours of ordering.
The e-commerce giant announced on Wednesday that the service, part of its fast-delivery expansion, is now available in more than 1,000 US cities — including Phoenix, Raleigh in North Carolina, and Tampa in Florida — with plans to reach 2,300 cities by the end of the year.
Prime members, who pay $14.99 monthly or $139 annually, can access the new grocery delivery option at no extra cost for orders over $25. Non-Prime shoppers can also use the service for a flat $12.99 fee per order, regardless of size. Previously, Prime subscribers ordering perishables through Amazon Fresh or Whole Foods Market paid an additional $9.99 monthly to receive free delivery on grocery orders over $35.
“This marks a major expansion for Amazon’s digital grocery service, largely because it’s being offered to its massive Prime member base at no additional cost,” said Blake Droesch, analyst with eMarketer. “Notably, Amazon has lowered the minimum order threshold to just $25 — a move that directly threatens Instacart by enabling customers to use Amazon for quick, one-off purchases, a core part of Instacart’s value proposition.”
Doug Herrington, CEO of Worldwide Amazon Stores, said: “Amazon shoppers can order milk alongside electronics … and check out with one cart and have everything delivered to their doorstep within hours.”
Brian Mulberry, portfolio manager at Zacks Investment Management, said the new offer could boost Prime membership numbers but stressed that “ensuring that the service is high-quality will be critical for growth.”
Stephen Ju, analyst at UBS, said the product update “decreases the barrier to entry for Prime and non-Prime users to buy groceries from Amazon and will likely pressure Uber Eats and DoorDash’s margins.”
Amazon shares rose 1.4% on Wednesday afternoon, while competitors in the grocery-delivery sector lost ground. Instacart, also known as Maplebear, fell 12.4%; DoorDash dropped 4.8%; Kroger slid 4.2%; Walmart declined 2.3%; and Uber, the parent company of Uber Eats, was down 0.8%.
The move adds to Amazon’s push to speed up deliveries. In June, the company announced a \$4 billion investment to expand same-day and next-day services to over 4,000 rural US communities by year-end. Walmart, meanwhile, said in May it will soon offer delivery within three hours to 95% of the US population.
However, Chedly Louis, vice-president of corporate finance at Moody’s Ratings, warned that “Amazon’s acceleration into perishable food delivery could strain small, independent grocers across the US.”
While expanding its US grocery operations, Amazon faces challenges abroad. In the UK, a study by the British grocery regulator, the Groceries Code Adjudicator, found the company is encountering hurdles with suppliers.
Boluwatife Enome
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