Amazon is diving deeper into the grocery business, ramping up its same-day delivery options for perishables like milk and fruit, which has caused stocks of competitors like Walmart and Instacart to tumble.
The retail giant shared on Wednesday its plans to expand same-day services to 2,300 cities by year-end.
This service will be available in cities such as Manhattan, Phoenix, Orlando, and Kansas City, with free membership for orders over $25 in most areas. For non-members, it will cost $13, no matter how much you order.
“This is a significant expansion of Amazon’s grocery offerings, especially as it’s available to a large base of Prime members without extra fees,” they noted.
Amazon has also lowered its minimum order to just $25, which could directly impact Instacart as it allows for quick, one-off purchases—something that’s central to Instacart’s appeal.
In the wake of this announcement, Instacart’s stock dropped nearly 11%, while DoorDash and Uber faced declines of 4.8% and 1.8% respectively. Major grocery players like Kroger, Walmart, and Ahold Delhaize saw their shares fall by 4.3%, 1.9%, and 0.7% respectively.
For reference, Walmart+ offers same-day delivery within three hours for a yearly fee of $98.
Interestingly, Amazon’s stock rose by 1% on the same day.
The company, which also owns Whole Foods and Amazon Fresh, mentioned that this new same-day offering complements its existing grocery services.
Doug Herrington, CEO of Worldwide Amazon Stores, stated, “We are continually innovating to make grocery shopping easier, quicker, and more affordable for our key members.”
He provided an example: “Customers can order milk alongside a mystery novel and electronics, or even oranges and potatoes, and have everything delivered to their front door within hours.”
Amazon emphasizes that its grocery expansion will focus on providing value, especially as consumers look to manage their budgets more effectively.
This move follows a period of solid revenue for the food delivery sector, contrasting with struggles in other industries.
In June, Amazon revealed plans to invest $4 billion in same-day and next-day delivery services across more than 4,000 rural communities in the U.S. by year’s end.
Earlier, CEO Andy Jassy described Amazon’s grocery segment as “very bullish” after overcoming some challenges.
Since acquiring Whole Foods in 2017, Amazon has been working to expand its footprint in both retail and grocery delivery, occasionally facing setbacks. Previously, they offered Prime Members free same-day delivery from Whole Foods, although now there is a $9.95 service fee for deliveries from that chain.
