Amazon is expanding its same-day grocery delivery service to more than 1,000 cities with plans to double the number of places it serves by the end of the year.
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Same-day grocery delivery from Whole Foods and Amazon Fresh is expected to be open in 2,300 cities by the end of 2025, with Prime members getting the benefit of free delivery with a $25 purchase. Non-Prime members would pay a $12.99 fee.
The news is impacting the major publicly traded grocers. As of early Wednesday afternoon, Kroger’s stock fell 4% from market open, Walmart’s stock price dipped 1.9%, Sprouts Farmers Market's fell 1.6% and Costco was down 1%.
An Amazon spokesperson told Bisnow the delivery will be fulfilled through the company’s same-day delivery logistics network, but they declined to say if the move would prompt an expansion in its footprint.
Amazon rapidly rolled out Amazon Fresh grocery stores during the pandemic before putting the brakes on the effort in 2023. Those efforts began to ramp back up at the beginning of 2024, with the company opening more Amazon Fresh locations and testing new store formats to integrate delivery into its brick-and-mortar operations.
At the same time, it’s started to renew its stalled logistics efforts. The company furiously built warehouses between 2020 and 2022 but started pulling back in 2023, closing locations and putting over 100 up for sublease.
But as of April, it was reportedly looking for partners to funnel up to $15B on roughly 80 new logistics facilities, largely for delivery hubs. Then, in May, it announced plans to spend $4B to triple its rural distribution centers, with the investment expected to be deployed through 2026.
Amazon had 474M SF of distribution space in the U.S. as of the end of the first quarter, with 50M SF in its pipeline, according to MWPVL International, an independent business management consultant that tracks the company’s footprint.
The company announced last year it would use its same-day fulfillment centers to support delivery of perishable groceries and pharmacy products. It owns about 60 Amazon Fresh stores and 540 Whole Foods in the U.S., Canada and the UK.
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