The world’s largest e-commerce company, Amazon, is about to grow even more, announcing Wednesday it now offers same-day delivery of fresh groceries in more than 1,000 cities in the U.S. The company expects that number to grow to at least 2,300 by year’s end.
What’s included
Customers can now order produce, dairy, meat, seafood, baked goods, frozen foods — even household staples — and have them delivered within hours.
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“By introducing fresh groceries into our same-day delivery service, we’re creating a quick and easy experience for customers,” Doug Herrington, CEO of Worldwide Amazon Stores, said. “They can order milk alongside electronics; oranges, apples and potatoes with a mystery novel; and a frozen pizza at the same time as tools for their next home improvement project … and have everything delivered to their doorstep within hours.”
Initial success at a smaller level
Amazon first piloted the service in cities like Phoenix, Orlando, and Kansas City, Missouri, offering items like bananas, strawberries, milk, avocados and eggs. The company says shoppers who used the fresh option returned more often than those who didn’t, prompting the nationwide expansion. New rollout cities include Raleigh, Tampa, Milwaukee and Columbus.
What it costs
The same-day service is free for Amazon Prime members on orders of $25 or more but costs about $3 if an order does not meet the minimum. Customers who are not Prime members pay $12.99 per order regardless of size.
The release indicates that Amazon generated more than $100 billion in sales of groceries and household essentials in 2024, not including sales from its Whole Foods and Amazon Fresh businesses.
Amazon trying to compete with rival Walmart and others
The Wall Street Journal reports Amazon CEO Andy Jassy told workers two years ago that the American grocery market was worth nearly $800 billion and he wanted a bigger share of that.
The Journal reports that Amazon’s grocery business has not grown as fast as rival Walmart. It cites eMarketer in reporting that Walmart’s online grocery business has now surpassed Amazon due to its ability to access thousands of its stores, a large team of drivers and offer same-day delivery to more than 90% of the country. As a result, Amazon is now trying to up its grocery game by tapping into the same-day service demand, with both products and convenience.
Amazon’s announcement of its expansion sent shares of grocery companies downward. Instacart was off by 11.5%, DoorDash by 4.1%, Kroger by 4.4%, and even Walmart was down by 2.5%.
