Amazon Cuts in Line at Online Grocery Checkout

Nothing goes better with bananas and eggs than a 12-pack of off-brand socks and a digital camera. At least, according to Amazon, which is rolling out a new system that’ll offer same-day delivery of fresh perishables alongside the platform’s less edible selections. 

Prime members in 1,000 US cities and towns, including Milwaukee and Columbus, can now order same-day rotisserie chickens with their other marketplace purchases, Amazon said yesterday. By the end of this year, Amazon plans to more than double the service’s reach.

Shares of rival grocery sellers, including Walmart and Kroger, dipped on the news. Instacart, which helped pioneer the online grocery space, saw its parent company Maplebear’s stock fall 12%.

Food Fight in Aisle 3

Amazon has struggled to take a bite out of the $875 billion US grocery market since launching an online grocery storefront in 2006 and later acquiring Whole Foods for $13.7 billion. The e-giant has since rolled out online grocery shopping programs like Fresh and Prime Now, as well as opened in-person Go stores (which it has since been closing down). 

But Amazon has remained a small player compared with rivals that don’t plan to make it easy for the marketplace to steal their shelf space:

• Walmart, the No. 1 US grocer, reported a quarterly profit from its e-commerce arm for the first time this year, and groceries made up 60% of Walmart’s net sales last year. Walmart said this spring it’ll soon offer three-hour delivery to most US customers. Target, meanwhile, has grown its grocery business by billions in recent years and is beefing up online offerings (literally: it teamed up with ButcherBox). 
• Instacart’s biz boomed during the pandemic, and its shares have climbed more than 50% since going public two years ago. The online grocery platform last week shared its sixth straight quarter of double-digit growth in total transaction value alongside an upbeat forecast. 

One-Stop Shop: Amazon’s latest move to let customers buy perishables and other items for same-day delivery could help the e-giant live up to its original promise of being the “Everything Store.” Amazon started testing its new grocery program last year in cities like Phoenix and Orlando, where it said many shoppers who tried the service were first-time grocery buyers on its platform. In an early sign the strategy shift could be working, Amazon said it consistently sells more strawberries in those regions than AirPods.