Amazon has started offering same-day grocery delivery in more than 1,000 cities and plans to expand to over 2,300 more by the end of 2025. The move sent shares of food delivery companies and supermarkets lower on Wednesday.
Customers can order fresh items like produce, dairy, meat, seafood, and baked goods, along with frozen foods and household products. Amazon Prime members will get free delivery on orders over $25 in most cities, while non-members will pay a $13 fee per order.
The announcement shook the market. Instacart’s stock fell nearly 11%, supermarket chain Kroger dropped 4.3%, Walmart slipped 1.3%, and Ahold Delhaize, the owner of several major grocery chains, also declined 1.3%. Analysts say Amazon’s $25 free-delivery threshold undercuts many competitors, which could pull customers away from them.
Amazon already owns Whole Foods Market and operates Amazon Fresh stores. The company has long sold non-perishable groceries online but has struggled to make fresh food delivery profitable. The new expansion aims to attract regular grocery shoppers, who might also buy other products.
Food delivery demand has remained strong in the U.S., and Amazon’s entry into same-day service increases competition for established players like DoorDash, Instacart, and Walmart.
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