Prime members will have to pay for grocery deliveries from Whole Foods
Amazon.com is currently offering free two-hour deliveries of grocery orders from Whole Foods at no additional charge to Prime members. That, Bloomberg reports, is about to change as the company is planning a pilot program whereby annual subscribers to the service will pay a fee of $9.95 to have their grocery orders delivered.
The pilot, which will begin on Aug. 30, will affect Prime members in the Boston and Chicago markets. Others in Manchester, NH, Portland, ME, and Providence, RI, will also have to pay for their grocery deliveries from Whole Foods.
An email sent to affected members included the message that the fee will be used to cover operating costs so that Whole Foods will be able to “offer the same competitive everyday prices in-store and online.” Grocery pickup will continue to be offered for free to Prime members.
Whole Foods saw orders for deliveries spike during the pandemic and Amazon’s decision to wrap free delivery and pickup as a perk for Prime members served to heighten demand even further. Amazon rolled out free curbside and in-store pickup last October on orders of $35 or more with members able to pick up within an hour in some cases.
Demand for delivery skyrocketed during the early months of the pandemic with Amazon, at one point, putting new customers on a waiting list as it tried to catch up with demand. Amazon also converted a Whole Foods location to a dark store to better help manage demand.
Sixty-four percent of American adults purchased groceries online at some point last year, according to FMI’s “U.S. Grocery Trends 2021” report and 29 percent placed weekly orders.
Many consumers also shifted their grocery purchases from supermarkets to mass merchandisers, according to FMI’s research. Walmart, the nation’s largest grocery retailer with over $288 billion in annual sales between its namesake stores and Sam’s Club, has frequently been cited as the biggest beneficiary of this trend. The retailer currently offers Walmart+ members free same-day delivery of groceries on orders of $35 or more.
Walmart also announced earlier this year plans to expand the number of automated local fulfillment centers it operates. These compact modular warehouses are built within existing locations or as an addition. Walmart began testing the concept at a store in Salem, NH, in 2019 before deciding to expand its use.
- Amazon to add delivery fee for Prime members who shop at Whole Foods – Bloomberg/Fortune
- Will Whole Foods draw more Prime shoppers with one-hour curbside pickup? – RetailWire
- Amazon puts new online grocery customers on hold, reconfigures Whole Foods – RetailWire
- 2021 U.S. Grocery Shopper Trends Offers A Window Into Consumers’ Thinking During This New Era Of At-Home Meals – FMI
- Will Walmart gain an unrivaled edge by automating its local grocery fulfillment? – RetailWire
- Will ending minimum purchases turn Walmart+ into a serious Amazon Prime rival? – RetailWire
DISCUSSION QUESTIONS: In what ways do you expect Prime members to react to Amazon’s $9.95 delivery fee for delivery orders placed with Whole Foods? Will grocery delivery fees become common retail practice even among customers participating in annual subscription programs such as Prime or Walmart+?