[NFBK] Amazon’s Now Offers Same Day Grocery Delivery in 1,000 New Cities

[Lonnie Swafford]

Amazon’s Now Offers Same Day Grocery Delivery in 1,000 New Cities




In a strategic push to capture a larger slice of the $875 billion U.S. grocery market, Amazon announced a massive expansion of its same-day grocery delivery service <https://amzn.to/46RaLOj> , sending ripples through the retail sector. The tech giant, which saw its stock rise 1.4% on the news, launched the service in 1,000 cities, including Phoenix, Orlando, Fla., and Kansas City, Mo., with plans to extend it to 2,300 U.S. locations by year’s end. In a move to lure more customers, Amazon is offering free same-day grocery delivery to Prime members, aiming to boost order volume and solidify its foothold in a market where it trails rivals like Walmart.

The announcement sent shockwaves through the grocery industry, with competitors’ shares tumbling. Instacart-owner Maplebear plummeted 11%, DoorDash fell 4%, Kroger slid 4.1%, and Walmart dipped 1.7%. Amazon’s aggressive expansion threatens to reshape the competitive landscape, particularly as it challenges Walmart’s dominance in online grocery sales. According to eMarketer, Walmart’s online grocery business has outpaced Amazon’s, leveraging its vast network of stores and drivers to reach over 90% of the U.S. population with same-day delivery.

Amazon, the undisputed leader in e-commerce, has struggled to replicate its dominance in groceries. Despite generating over $100 billion in gross sales of groceries and household essentials in 2024 (excluding Whole Foods and Amazon Fresh), the company lags behind in fresh food and perishable goods. To address this, Amazon has been experimenting with stocking produce at its delivery hubs, with three-quarters of its fresh-food shoppers this year being first-time buyers. The company’s $13.7 billion acquisition of Whole Foods in 2017 and its tech-driven physical stores—featuring automatic checkout and palm-scan payments—signal its long-term commitment to the sector.

CEO Andy Jassy, who two years ago highlighted the $800 billion U.S. grocery market as a key growth opportunity, is doubling down on this vision. Amazon’s latest move includes a $4 billion investment to triple its delivery network by 2026, extending same-day and next-day delivery to over 4,000 smaller cities, towns, and rural areas. This expansion aims to close the gap with competitors and meet rising consumer demand for convenience.

Wall Street, however, remains skeptical. Amazon’s stock dropped 7% last month after its cloud-computing arm reported slower growth than rivals, raising concerns about the company’s ability to sustain its rapid expansion. While Amazon’s ventures into healthcare, personal computing, and physical retail have yet to deliver market dominance, its grocery push could be a game-changer—if it can overcome logistical challenges and win over cost-conscious shoppers.

As Amazon ramps up its grocery ambitions, the retail giant is betting that its technological edge and vast delivery infrastructure will finally give it the upper hand in one of retail’s most competitive arenas. Whether this move will satisfy investors and reshape the grocery landscape remains to be seen.

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