Will the New Amazon Grocery Subscription Take Off or Fall Flat?

Amazon has launched a new subscription-based grocery delivery service aimed at streamlining the shopping experience for its Prime members. This move comes as the retail giant continues its efforts to simplify grocery shopping, a task that has become increasingly complex in recent years.

The grocery market has seen significant fragmentation in recent times. While some shoppers stick to their regular supermarkets, others explore niche markets for specialty foods and seasonal goods. Additionally, a growing number of customers prefer the convenience of online shopping, relying on fulfillment apps to shop for them and deliver groceries to their doorsteps within hours.

Amazon’s latest offering aims to cater to these diverse shopping preferences by providing a grocery delivery service that promises to be convenient and cost-effective. Available for $9.99 per month (or $4.99 for SNAP/EBT customers), the subscription offers unlimited delivery on orders over $35 across 3,500 cities in the U.S. Prime members can also enjoy a 30-day free trial of the service.

Key features of the Prime grocery delivery subscription include:

• Availability at Whole Foods Market, Amazon Fresh, and other local grocery and specialty retailers on Amazon.com
• One-hour delivery windows
• Priority access to recurring reservations on weekly orders

In Amazon’s announcement, Tony Hoggett, senior VP of worldwide grocery stores, highlighted the new subscription as a means to provide additional value and savings on delivery fees for customers who regularly order groceries from Amazon Fresh, Whole Foods Market, and other retailers on Amazon.com. The ultimate goal, he said, is to offer a “best-in-class grocery shopping experience, whether in store or online, grounded in the values Amazon is known for: price, selection, and convenience.”

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The new Amazon subscription also provides access to a wide range of national brands and natural and organic foods. It includes one-hour delivery windows at no extra cost where available, unlimited 30-minute pickup on any size order, and priority access to recurring reservations for weekly grocery orders. Customers can shop from local grocery and specialty retailers like Cardenas Markets, Bartell Drugs, Save Mart, Rite Aid, Mission Wine & Spirits, and Pet Food Express.

The new grocery delivery service builds on a pilot program launched in late 2023 in Columbus, Ohio; Sacramento, California; and Denver, Colorado. A recent survey from the pilot showed that over 85% of respondents were extremely or very satisfied with the unlimited free delivery benefit. Customers highlighted savings on delivery fees and increased convenience as key reasons for staying subscribed.

In addition to the delivery benefits, Prime members shopping at Amazon Fresh and Whole Foods Market will have access to exclusive deals both online and in-store. Eligible Prime members can earn unlimited 5% back on purchases when using their Prime Visa online at Amazon.com, Amazon Fresh, and Whole Foods Market.

Amazon’s acquisition of Whole Foods in 2017 for $13.7 billion has played a significant role in expanding its presence in the brick-and-mortar grocery space. The company has since lowered prices, particularly for Prime members, and enhanced its reach in the grocery market.