Amazon Expands Same-Day Grocery Delivery to Over 1,000 US Cities, Doubling Grocery Purchases

Amazon has expanded its free same-day grocery delivery service to over 1,000 US cities and plans to reach 2,300 by year-end. The service complements Amazon Fresh and Whole Foods Market, offering same-day delivery for produce, dairy, meat, seafood, baked goods, and frozen foods alongside other products. Grocery purchases on Amazon have doubled, with 37% of US Amazon customers purchasing traditional grocery items in their latest order.

Amazon has significantly expanded its free same-day grocery delivery service, now available in over 1,000 US cities and with plans to reach 2,300 by the end of 2025 [1]. This expansion complements Amazon Fresh and Whole Foods Market, offering same-day delivery for a wide range of grocery items, including produce, dairy, meat, seafood, baked goods, and frozen foods, alongside other products.

The service is free for Amazon Prime members with orders over $25, with a $2.99 fee for orders below this threshold. Non-Prime customers can access the service for a flat $12.99 fee, regardless of order size [1]. This move aims to intensify competition in the retail delivery sector, particularly with other giants like Walmart [2].

Grocery purchases on Amazon have doubled, with 37% of US Amazon customers purchasing traditional grocery items in their latest order [3]. The expansion is seen as a game-changer in the $90 billion online grocery market opportunity, positioning Amazon to compete more effectively with Walmart, Target, and Instacart [1].

Amazon's CEO, Andy Jassy, has expressed confidence in the company's grocery business, noting strong customer adoption and high sales growth. The company generated $100 billion in grocery and household essential sales in 2024, excluding Whole Foods [2]. The expansion of same-day grocery delivery to Prime members is a strategic move for Amazon, leveraging the company's robust logistics infrastructure and Whole Foods Market network to offer a seamless shopping experience.

However, Amazon still faces challenges in the physical grocery retail arena. While the company has made significant strides in online grocery delivery, the physical grocery market remains dominated by traditional retailers. Amazon's strategy in this segment is less clear, with previous attempts at physical stores and separate apps for grocery delivery having struggled [1].

The stock price of Amazon (AMZN) rose 1% following the announcement, indicating investor optimism about the company's grocery delivery expansion [2]. Analysts have maintained positive ratings on Amazon, with Bank of America Securities and Wedbush both maintaining Buy and Outperform ratings, respectively [2].

References:
[1] https://www.wcvb.com/article/amazon-same-day-grocery-delivery-expansion/65676815
[2] https://www.benzinga.com/analyst-stock-ratings/reiteration/25/08/47130312/amazons-grocery-delivery-expansion-seen-as-game-changer-in-90-billion-online-market-opportunity
[3] https://www.independent.co.uk/news/world/americas/amazon-same-day-delivery-grocery-b2807324.html