Amazon Shares Climb as It Launches Massive Free Same-Day Grocery Delivery Expansion for Prime Members
The e-commerce leader is aggressively expanding its grocery service to over 2,300 U.S. locations by year-end, making it a free perk for its massive Prime subscriber base.
SEATTLE – Amazon.com Inc. (NASDAQ: AMZN) delivered a major win for its customers on Wednesday, announcing a vast expansion of its same-day grocery delivery service and making it a free benefit for Prime members on qualifying orders. The move, aimed at capturing a larger share of the competitive grocery market, was met with immediate investor approval, sending Amazon’s stock up over 2% to $229.12.
The service, which is now available in over 1,000 U.S. cities, is set to more than double its reach to 2,300 locations by the end of the year. This expansion brings the convenience of rapid grocery delivery to major cities like Phoenix, Raleigh, and Tampa, and is backed by a $4 billion investment to enhance delivery services in thousands of rural communities.
For Amazon’s tens of millions of Prime members, the new offering is a significant value-add. Subscribers can now receive free same-day grocery delivery from Amazon Fresh or Whole Foods Market on orders over $25. This eliminates the previous $9.99 monthly fee that was required for the service, effectively lowering the barrier for customers to make Amazon their go-to for groceries.
“This marks a major expansion for Amazon’s digital grocery service, largely because it’s being offered to its massive Prime member base at no additional cost,” noted eMarketer analyst Blake Droesch, highlighting the strategic importance of the move.
The market reacted swiftly to the news, validating Amazon’s aggressive strategy. While Amazon’s shares gained, competitors in the grocery delivery space saw their stocks fall, with Instacart shares dropping 12.4% and DoorDash declining 4.8%. This reaction underscores the significant competitive pressure Amazon is now placing on the market.
UBS analyst Stephen Ju noted that the move “decreases the barrier to entry for Prime and non-Prime users to buy groceries from Amazon,” signaling a powerful push to integrate groceries seamlessly into the Amazon ecosystem. Customers can now conveniently order everything from fresh strawberries and milk to electronics in a single, streamlined transaction.
This strategic expansion demonstrates Amazon’s commitment to long-term growth and its ability to leverage its vast logistics network and loyal Prime membership base to disrupt yet another major retail category.
