Categories
Technology

Amazon tests grocery subscription service for Prime members

An independent contractor wearing a protective mask and gloves loads Amazon Prime grocery bags into a car outside a Whole Foods Market in Berkeley, California, on Oct. 7, 2020.

David Paul Morris | Bloomberg | Getty Images

Amazon is piloting a new grocery subscription for members of its Prime program, the company said Thursday, marking the latest recalibration of its online supermarket offerings.

Members of the company’s Prime program will have the option to pay $9.99 per month to get unlimited grocery delivery from Whole Foods and Amazon Fresh on orders more than $35. They’ll also have access to 30-minute pickup on orders of any size. To start, the service is rolling out in Denver, Colorado; Sacramento, California; and Columbus, Ohio.

“We’re always experimenting with features to make shopping easier, faster, and more affordable, and we look forward to hearing how members who take advantage of this offer respond,” Tony Hoggett, who leads Amazon’s physical stores business, said in a statement.

Amazon is betting Prime members will want to pay an additional monthly charge for fresh food to be dropped at their doorstep without pesky delivery fees. A Prime subscription costs $139 per year, or $14.99 per month, in the U.S., and the membership’s perks include free, speedy shipping and access to video streaming. With the add-on grocery subscription, the offering could drive bigger, and more frequent, food orders among Prime members.

Amazon has tweaked its fee-free delivery threshold for Fresh and Whole Foods orders in recent years amid mounting costs. In October, the company lowered its threshold for free Fresh grocery delivery to orders over $100, after setting the minimum at $150 months earlier. In 2021, the company introduced a $10 service fee for Whole Foods delivery orders to Prime members.

Prior to the fee changes earlier this year, the company offered free Amazon Fresh grocery delivery on orders above $35 at no extra cost for Prime members.

Amazon has been determined to cement itself as a grocery destination for shoppers. Since acquiring Whole Foods Market in 2017 for $13.7 billion, it has launched its own chain of Fresh supermarkets, and it’s taken steps more recently to unify its online and brick-and-mortar grocery operations, while appealing to a broader swath of consumers. Last month, the company opened Fresh grocery delivery to people without Prime anywhere in the U.S., after testing the feature in a handful of cities.

Don’t miss these stories from CNBC PRO:

Leave a Reply

Your email address will not be published. Required fields are marked *