Amazon will begin offering its grocery delivery service to customers who aren’t Prime members in select cities.
Amazon Fresh is now available to non-Prime members in a dozen metro areas. Fees are $13.95 for deliveries under $50; $10.95 for orders between $50-$100; and $7.95 for orders over $100. Pick-up orders, where available, do not have a fee.
Non-members pay about $4 more for delivery compared to rates for Prime subscribers, who get the fee waived for orders over $150.
It’s the latest move from Amazon to eat up market share in the $800 billion grocery industry. The company has struggled to dominate grocery like it has with online shopping and cloud computing.
Amazon first rolled out Amazon Fresh delivery in 2007. The tech giant later experimented with different models and pricing for grocery delivery, competing with others such as Instacart and traditional grocers. It also invested heavily in brick-and-mortar, buying Whole Foods for $13.7 billion in 2017 and opening its own high-tech Amazon Go convenience stores and larger-scale Amazon Fresh locations.
But in February, Amazon CEO Andy Jassy said that the company was pausing the expansion of its Amazon Fresh grocery stores, amid broader cutbacks, “until we have that equation with differentiation and economic value that we like.”
Amazon is now facing lease lawsuits, including one in the Seattle area, related to its Amazon Fresh stores.
Amazon last month laid off hundreds of Fresh store employees, The Washington Post reported last week.
The company closed eight Amazon Go stores earlier this year.
Prime members in select areas previously received free grocery delivery on any orders over $35, but Amazon tweaked the fee structure in January.
In 2021, Amazon added a $9.95 fee to Whole Foods delivery orders, which were previously free to Prime members who spent more than $35.
Bloomberg reported Wednesday that Amazon is looking to streamline its online grocery options (Whole Foods, Amazon Fresh, Amazon.com) into one online cart.
Amazon also announced that it is redesigning Fresh stores in Chicago.
The cities where Fresh delivery is available to non-Prime members include: Austin, Boston, Charlotte, Dallas-Fort Worth, Denver, Nashville, Phoenix, Portland, Richmond, Sacramento, San Diego, and San Francisco.
Amazon, which closed its bookstores and other physical retail locations last year, reported physical store revenue of $4.9 billion, up 7%, during the first quarter. The company reports its second quarter results on Thursday.
