Amazon Stock Jumps on Fresh Grocery Delivery Move, Analysts See "New Narrative"

Amazon's grocery news has boosted its stock, with shares up nearly 3% and extending gains for the year. Enthusiasm for the company's move into fast delivery of fresh groceries has analysts applauding, citing potential customer frequency benefits and lock-in. Morgan Stanley estimates offline grocery spending is worth $1.5 trillion in the US, with fresh and perishable goods making up 45% of that total. Amazon's better grocery service could boost Prime membership value, with analysts expecting a price increase next year without significant churn or customer acquisition.

Amazon's latest move into fast delivery of fresh groceries has significantly boosted its stock performance. Shares of Amazon (AMZN) rose nearly 3% on Thursday, extending gains for the year and placing it fifth among tech giants year-to-date. The move has been enthusiastically received by analysts who see it as a strategic advantage in the grocery market.

Amazon's expansion of same-day delivery for perishable items comes at a critical time. The company has been expanding its grocery delivery services for years, but it has struggled to find a profitable model. This new initiative aims to capitalize on the growing demand for convenience and speed in grocery shopping.

The expansion, which will cover over 1,000 cities by the end of 2025, includes perishable items such as produce, dairy, meat, seafood, and baked goods. Prime members will enjoy free delivery on orders over $25, while non-members will pay a $12.99 fee regardless of order size. This move is seen as a direct challenge to competitors like Walmart, Kroger, and Instacart, which also offer same-day delivery but with higher minimum order requirements.

Analysts at Morgan Stanley estimate that the offline grocery market in the US is worth $1.5 trillion, with fresh and perishable goods making up 45% of that total. Amazon's improved grocery service could significantly boost the value of Prime memberships, potentially leading to a price increase next year without significant churn or customer acquisition.

The company's success in this area could also have broader implications for its overall business. Amazon's grocery services already account for one out of every three units sold on Amazon.com, growing twice as fast as other categories in the US during Q1 2025. This expansion could further accelerate that growth and solidify Amazon's position as a major player in the grocery market.

Amazon's rivals have reacted to the news with mixed responses. While some stocks, such as those of Instacart, have fallen, others, like Walmart and Kroger, have seen more modest declines. This suggests that investors are still digesting the news and considering the long-term implications.

In conclusion, Amazon's latest move into fast delivery of fresh groceries is a significant step forward for the company. It addresses a key gap in its service offerings and positions it to capture a larger share of the lucrative grocery market. The stock market's positive reaction indicates that investors are optimistic about the potential benefits of this expansion.

References:
[1] https://www.cnn.com/2025/08/13/food/amazon-grocery-delivery-expansion
[2] https://panasiabiz.com/111038/amazon-expands-grocery-delivery-for-prime-members/
[3] https://thepeninsulaqatar.com/article/14/08/2025/amazon-to-offer-same-day-groceries-delivery-in-2300-cities
[4] https://www.investopedia.com/grocery-news-has-amazon-stock-delivering-gains-11791321