Amazon to Expand Grocery Delivery, Resume Supermarket Openings

Matt Day, Bloomberg News

(Bloomberg) -- Earlier this year, Amazon.com Inc. began testing a grocery delivery service for people who don’t subscribe to its Prime loyalty program. Now the e-commerce giant is rolling out the service to the rest of the US as it prepares to open more supermarkets next year.

The expansion, announced Thursday, is part of a grocery reboot reported by Bloomberg in August. Shoppers will be eligible for the offering anywhere the company operates its Amazon Fresh service. Non-Prime members will be charged $4.95 to $13.95 for delivery, while members now pay $6.95 to $9.95, with free deliveries over $100.

Claire Peters, the worldwide vice president of Amazon Fresh, said in an interview that executives were “pleasantly surprised” at the number of people who ordered groceries during the trial. Delivery from Whole Foods Market stores is also coming to non-Prime subscribers “in the very near future,” she said.

Amazon has a large online grocery business that sells household staples, paper towels, cleaning products and more. But in recent years the Seattle-based company has expanded into physical stores, an acknowledgment that many shoppers prefer to grab food in person.

In addition to Whole Foods, the company operates convenience stores, pocket markets and Amazon Fresh supermarkets that the company began opening during the pandemic.

Grocery chief Tony Hoggett, a former Tesco Plc executive, halted store openings last year while Amazon revised its fresh-food strategy. Hoggett and his lieutenants ultimately opted to redesign stores to increase selection and add things like hot coffee and donuts, emphasizing traditional retail touches rather than the cashierless technology the company has touted for years.

“We’ve learned that if we don’t master the grocery fundamentals, nothing else matters,” Peters said.

She said the company plans to resume opening new Fresh stores in 2024, after a pause of more than a year. Amazon also has redesigned five locations, including three in the Los Angeles area that wrapped up renovations recently.

“We will have a good pipeline for next year,” Peters said. “What we won’t do is open stores aimlessly.”