AMAZON has fired another shot in its grocery war with Walmart by rolling out free same-day delivery for fresh food to millions of Prime members.
The new perk lets shoppers get strawberries, milk, frozen dinners, and even meat dropped at their doorstep just hours after ordering.
Amazon is now offering free same-day delivery for perishable groceries to Prime members (stock image)[/caption]
The service is live in over 1,000 US cities[/caption]
The expansion, announced Wednesday, is now live in more than 1,000 US cities, including Phoenix, Raleigh and Tampa.
Amazon said the rollout will spread to 2,300 cities by the end of the year.
Prime members can now unlock the service on orders over $25, a lower threshold than before, Reuters reported.
Non-members have to pay a $12.99 fee, no matter how small or big their order is.
The company previously tied perishable grocery orders to Amazon Fresh and Whole Foods Market.
Back then, Prime members had to pay an extra $9.99 monthly fee and hit a $35 minimum for free grocery delivery.
That requirement is now gone, with Amazon moving the service to its existing same-day logistics network.
“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 at eMarketer.
He added that lowering the minimum order to $25 was a direct challenge to Instacart, which built its brand on quick one-off shopping.
Walmart+, meanwhile, charges $98 a year and offers same-day delivery in under three hours, with some orders arriving in 30 minutes.
Brian Mulberry, portfolio manager at Zacks Investment Management, said Amazon’s offer could boost Prime subscriptions but warned quality would be key.
Amazon has been pouring billions into speeding up deliveries.
In June, the company said it was investing $4 billion to bring same-day and next-day delivery to more than 4,000 rural US towns by year-end.
Competitors have been racing to match the pace.
Amazon Same-Day Grocery Delivery
- Who can use it: Prime members (free on orders over $25); non-members pay $12.99 per order
- What’s included: Fresh produce, milk, meats, frozen meals, and other perishable items
- Coverage: Live in 1,000+ US cities, expanding to 2,300 by year-end
- Previous requirement: Extra $9.99/month for Prime Fresh or Whole Foods delivery with $35 minimum
- Goal: Combine perishables with Amazon’s same-day delivery network for faster, convenient shopping
In May, Walmart announced that 95% of the US population will soon have access to three-hour delivery.
The rivalry is already shaking up the stock market.
On Wednesday, Amazon shares jumped 1.4% while rivals tumbled.
Instacart, also known as Maplebear, sank 12.4%, while DoorDash fell 4.8% and Kroger dropped 4.2%.
Walmart shares slipped 2.3% and Uber, parent of Uber Eats, edged down 0.8%.
Stephen Ju, analyst at UBS, said the cheaper grocery option could also eat into margins at Uber Eats and DoorDash.
Amazon shoppers can now toss milk and electronics in the same cart and see both arrive within hours.
Doug Herrington, CEO of Worldwide Amazon Stores, said in a press release: “Customers can order milk alongside electronics … and check out with one cart and have everything delivered to their doorstep within hours.”
But the rapid expansion could spell trouble for small, independent grocers already under pressure.
Chedly Louis, vice president of corporate finance at Moody’s Ratings, warned Amazon’s grocery play will strain mom-and-pop stores.
Amazon’s global grocery push hasn’t been without hurdles.
A recent UK study by the Groceries Code Adjudicator found the tech giant was facing issues with suppliers across the Atlantic.
For now, US shoppers stand to gain as Amazon slashes barriers and takes direct aim at Walmart, Instacart and other delivery rivals.
Amazon shoppers can now toss milk and electronics in the same cart and see both arrive within hours (stock image)[/caption]
