Amazon Counters Walmart with Free Same-Day Grocery Delivery for Prime

Punch, counter-punch.

Amazon waited an entire month to swing back at Walmart’s new grocery delivery program, making delivery from Amazon Fresh and Whole Foods free for Prime members by eliminating the $14.99 per month charge on orders of at least $35.

This will add to Amazon’s already gargantuan shipping and delivery costs, which ballooned 46% in Q3 to $9.6 billion as it continues to buy share and competitive clout. The company made usually cheery analysts and investors nervous when profits came in lower than expected.

Under Delivery Unlimited from Walmart, subscribers pay $98 per year or $12.95 per month for same-day grocery delivery from about 1,500 U.S. stores, compared to $7.95 or $9.95 per order outside the program.

“Prime members love the convenience of free grocery delivery on Amazon, which is why we’ve made Amazon Fresh a free benefit of Prime, saving customers $14.99 per month,” said Stephenie Landry, VP of Grocery Delivery for Amazon in a blog post. “Grocery delivery is one of the fastest growing businesses at Amazon, and we think this will be one of the most-loved Prime benefits.”

One- and two-hour grocery delivery is available in most places, Amazon said. It will offer the free service to all Prime members currently shopping either Fresh or Whole Foods, but other members can sign up and wait for an approval notification.

The company is anticipating high demand so it makes sense to control the addition of new users. It’s available in 2,000 cities and towns, most of that coverage coming from its 480 Whole Foods stores; only 21 locations are covered by Amazon Fresh, the company told Tech Crunch. Amazon Fresh orders are fulfilled from small centers close to population centers.

Traditional grocers like Wakefern, Albertsons and Kroger as well as big boxes like Walmart and Target have been fighting back against Amazon’s grocery push by stepping up curbside pickup programs and investing heavily in automation and micro fulfillment centers.

After scaling back Amazon Fresh operations in nine states in 2017, the company has been building it up again this year, adding the service in Las Vegas, Houston, Minneapolis and Phoenix in recent months according to CNET.