Amazon is now delivering perishable groceries the same day in over 1,000 cities across the US
Amazon now delivers fresh food to Prime users for free the same day in over 1,000 US cities.
Amazon Inc. now offers same-day delivery for perishable foods. This means that Prime members can get goods like milk, meats, frozen dinners, and strawberries within hours of placing an order.
As part of its fast-delivery growth, the e-commerce giant said on Wednesday that the service is now available in more than 1,000 US cities, such as Phoenix, Raleigh, and Tampa in Florida. By the end of the year, the company hopes to have reached 2,300 cities.
For orders over $25, the new grocery delivery service is free for Prime users who pay $14.99 a month or $139 a year. People who aren’t Prime members can also use the service for a flat $12.99 fee per order, no matter how big or small. Before, Prime members who bought perishable goods through Amazon Fresh or Whole Foods Market had to pay an extra $9.99 a month to get free delivery on food orders over $35.
Blake Droesch, an analyst at eMarketer, said, “This is a big step forward for Amazon’s digital grocery service, mostly because it’s being offered to its huge Prime member base at no extra cost.” “Notably, Amazon has lowered the minimum order amount to just $25. This directly threatens Instacart because it lets customers use Amazon for quick, one-time purchases, which is one of the main things that Instacart does well.”
Doug Herrington, CEO of Worldwide Amazon Stores, said, “Amazon customers can buy both electronics and milk.” and check out with just one cart. Within hours, everything will be brought right to their door.
Brian Mulberry, portfolio manager at Zacks Investment Management, said that the new offer might get more people to join Prime, but he stressed that “making sure the service is high-quality will be critical for growth.”
Stephen Ju, an analyst at UBS, said that the update “lowers the barrier to entry for Prime and non-Prime users to buy groceries from Amazon […] and will likely put pressure on the margins of Uber Eats and DoorDash.”
On Wednesday afternoon, Amazon stock went up 1.4%, while other food delivery services lost ground. DoorDash fell 4.8%, Kroger fell 4.2%, Walmart fell 2.3%, and Uber, the parent company of Uber Eats, fell 0.8%. Instacart, also known as Maplebear, fell 12.4%.
As part of its plan to speed up shipping, Amazon made this change. The company said in June that it would spend ¥4 billion to bring same-day and next-day delivery to more than 4,000 rural US towns by the end of the year. Walmart, on the other hand, said in May that it will soon deliver to 95% of people in the US within three hours.
Though, Chedly Louis, vice-president of corporate finance at Moody’s Ratings, said, “Amazon’s speeding up of perishable food delivery could put a strain on small, independent grocers across the US.”
Amazon is having trouble in other countries while it grows its food business in the US. In the UK, the Groceries Code Adjudicator, which is in charge of grocery regulation, found that the company is having trouble with its sellers.
