Amazon has expanded its same-day grocery delivery service for Prime members to over 1,000 cities and towns in the US, with plans to reach more than 2,300 locations by the end of the year.

Prime members can get fresh groceries and household items within hours on orders over US$25, or pay a US$2.99 fee for smaller orders.

Non-Prime customers can access the service for US$12.99 per order.

The service, previously handled through Amazon Fresh or Whole Foods Market, was tested in Phoenix last year before expanding to Orlando and Kansas City.

Amazon said it generated over US$100 billion in gross sales of groceries and household essentials last year, not including sales from Whole Foods Market and Amazon Fresh.

Shares in Amazon rose 1% following the announcement, while competitors Walmart, Kroger, and Target saw their shares decline.

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🔗 Source: APNews

🧠 Food for thought

1️⃣ Amazon’s 17-year grocery journey shows persistence finally paying off

Amazon’s grocery ambitions date back much further than most realize, with Amazon Fresh launching in Seattle in 2007 1.

Despite this early start, progress was notably slow. By 2017, online grocery delivery still represented only 5% of the U.S. market 1.

The current expansion represents a strategic shift from operating separate grocery fulfillment systems to integrating fresh products into Amazon’s same-day logistics network.

This integration allows Amazon to leverage the scale economies it’s built over decades, potentially addressing the profitability challenges that have long affected grocery delivery services.

Amazon’s persistence through years of limited market penetration demonstrates how the company prioritizes long-term infrastructure building over short-term profits, similar to its approach with cloud services.

2️⃣ Traditional grocery giants face a logistics disadvantage despite market dominance

While Walmart commands 23.6% of the U.S. grocery market and Kroger holds 10.1% 2, their stock prices fell immediately when Amazon announced this expansion, signaling investor concern about competitive dynamics.

Amazon’s key advantage lies not in grocery expertise but in its ability to combine fresh produce with electronics, household items, and other products in a single efficient delivery route.

This creates operational efficiencies that traditional grocery chains struggle to match, as they typically focus on single-category fulfillment rather than cross-category logistics optimization.

The fact that Amazon generated over $100 billion in grocery and household essentials sales last year—excluding Whole Foods and Amazon Fresh—demonstrates how the company has quietly built substantial grocery volume through its main platform.

Traditional retailers now must compete not just on product selection and pricing but against Amazon’s integrated logistics network that can deliver strawberries alongside AirPods using the same delivery infrastructure.

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