As online grocery sales continue to soar, Amazon this week announced its latest bid to become a digital grocery powerhouse and compete with Walmart. Consumers can now purchase perishable grocery items through its same-day delivery service.
The service is now available to shoppers in 1,000 locations across the US, and the e-comm giant said that’ll expand to 2,300 by the end of the year. Perishable items include produce, dairy, meat, baked goods, and frozen offerings, which can also be ordered alongside any other Amazon products in the same cart.
The move could help Amazon, which has found muted success in the fresh grocery space, compete with its biggest same-day delivery rival, Walmart, which is the top digital grocery retailer in the US, per eMarketer. Walmart currently accounts for approximately 40% of US all online grocery sales, according to Brick Meets Click.
The efforts to win in online grocery come amid the segment’s burgeoning success, with penetration reaching a record 81 million, or 61% of households and US online grocery sales growing 26% YoY to $10 billion in July, Brick Meets Click reported this week. Delivery sales jumped 36% YoY to $4.3 billion, while ship-to-home sales increased 10% YoY to $1.6 billion.
Amazon said it uses a temperature-controlled fulfillment system for the perishable orders, which undergo a “six-point quality check” before they arrive at shoppers’ doors in the same insulated bags they’d receive for Amazon Fresh and Whole Foods deliveries. Delivery is free over $25 or $2.99 under $25 in most cities for Prime members, Amazon said, and $12.99 for non-Prime members.
The company tested the offering in locations like Phoenix, Arizona; Orlando, Florida; and Kansas City, Missouri, and has found shoppers use the same-day delivery service twice as often as those who don’t buy fresh food on the platform, and are increasingly turning to Amazon Fresh and Whole Foods as well, Doug Herrington, CEO of Worldwide Amazon Stores, said in a statement. The company also said strawberries beat Airpods as a top five seller on Amazon in these regions.
Amazon’s other recent efforts to expand its grocery biz include reorganizing its leadership. In January, it tapped Whole Foods CEO Jason Buechel to serve as VP of worldwide grocery stores while also continuing to lead Whole Foods. And in June, Business Insider reported Amazon was restructuring its leadership to organize Whole Foods more closely under Amazon’s operations.
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