Amazon and Whole Foods announced Thursday that Amazon Prime customers will be able to get free two-hour delivery of groceries and "select alcohol" from Whole Foods through Prime Now, the company's same-day delivery service. The new feature rolls out today in certain neighborhoods in Austin, Cincinnati, Dallas, and Virginia Beach and will expand across the US this year.
Prime customers who'd like their groceries more quickly can pay $7.99 on orders of $35 or more for one-hour delivery.
"This gives them a big leg up over other delivery providers that often experience a disconnect between their services and the source stores," said Andrew Park, senior director of consumer experience strategy at the tech company InMoment, in an emailed statement. "Brick-and-mortar grocery brands have attempted to launch their own delivery programs, but Prime's proven ability to execute consistently could be the tipping point to the adoption of online grocery.”
Amazon, which currently claims about 44% of online retail sales, has been adding benefits to increase its subscription base, including in-store discounts at Whole Foods for Prime members. Last month, when it increased its rate for monthly Prime subscribers (the annual rate remained the same at $99), a spokesperson told BuzzFeed News, "The number of items eligible for unlimited Free Two-Day Shipping increased in recent years from 20 million to more than 100 million items."
Amazon's announcement is already wreaking havoc on the grocery industry; shares of grocery chains Kroger and Sprouts Farmers Market fell precipitously Thursday morning.
Venessa Wong is a business reporter for BuzzFeed News and is based in New York. Wong covers the food industry.
Contact Venessa Wong at firstname.lastname@example.org.
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