Amazon Expands Grocery Delivery to Over 1,000 Cities and Towns.

Amazon expands its grocery delivery service to over 1,000 cities and towns, allowing customers to order fresh groceries with same-day delivery. The move aims to increase convenience and accessibility for customers, further solidifying Amazon's position in the grocery sector.

Amazon (NASDAQ: AMZN) has significantly expanded its grocery delivery service, making it available in over 1,000 cities and towns across the United States. This expansion allows customers to order fresh groceries with same-day delivery, enhancing convenience and accessibility. The company aims to reach more than 2,300 cities by the end of 2025 [1].

The new service includes a wide range of perishable items such as produce, dairy, meat, seafood, baked goods, and frozen foods. Customers can now order these items alongside millions of other products available for same-day delivery, such as electronics, fashion, and household essentials. This integration simplifies grocery shopping, enabling customers to check out with a single cart and receive all items within hours [3].

Amazon Prime members will enjoy free same-day delivery on orders over $25 in most cities. For smaller orders, Prime members can still choose same-day delivery for a $2.99 fee, while non-Prime customers will pay $12.99 per order [3]. This move is part of Amazon's broader strategy to expand its same-day and next-day delivery capabilities, aiming to reach 4,000 smaller cities, towns, and rural areas by the end of 2025 and investing $4 billion to triple its delivery network by 2026 [2].

The expansion of Amazon's grocery delivery service could have a significant impact on the broader grocery sector. Analysts at JPMorgan note that this move could support Amazon's continued share gains across US e-commerce, despite increased competition. The strategy may build strong Prime appeal, drive higher purchase frequency, increase ad revenue, and pressure legacy grocers to rethink pricing and delivery fees [4].

This expansion marks one of Amazon's most aggressive plays in the grocery sector, following its previous investments in rural delivery and the acquisition of Whole Foods Market. The company has been testing the service in cities like Phoenix, Orlando, and Kansas City, where customers have responded positively, with many first-time grocery shoppers returning to use Same-Day Delivery twice as often [3].

Amazon's move has already sent shockwaves through the sector, with shares of Walmart (WMT), Costco (COST), Kroger (KR), Albertsons (ACI), and BJ's Wholesale Club (BJ) slipping in the single digits on the day of the announcement [4]. The stocks were in the green on Thursday morning, indicating a market adjustment to the new reality of Amazon's grocery delivery expansion.

Amazon's grocery business surpassed $100 billion in gross merchandise value last year, making up around 20% of its US GMV. The company's latest move allows customers to order groceries through Amazon Fresh and Whole Foods Market, in addition to the new same-day delivery service. This integration of fresh food delivery into Amazon's logistics network could drive significant growth and profitability for the company [4].

In conclusion, Amazon's expansion of its grocery delivery service to over 1,000 cities and towns represents a significant strategic move. The company's focus on convenience, accessibility, and integration of fresh groceries with other products is likely to further solidify its position in the grocery sector and have a substantial impact on competitors.

References:
[1] https://seekingalpha.com/news/4484645-amazon-rocks-the-grocery-sector-with-a-major-expansion-of-its-same-day-delivery-service-that-includes-perishable-food
[2] https://www.morningstar.com/news/dow-jones/202508137762/amazon-to-expand-same-day-grocery-delivery
[3] https://timesofindia.indiatimes.com/technology/tech-news/amazon-launches-biggest-ever-attack-on-walmart-to-offer-one-day-grocery-delivery-in-1000-plus-cities-across-us-delivery-fee-and-other-details/articleshow/123302131.cms
[4] https://finance.yahoo.com/news/amazon-could-seize-market-share-and-drive-down-fees-with-its-latest-grocery-bet-145855380.html