Amazon turning these four cities into grocery battlegrounds


Amazon has indicated it plans to roll out Whole Foods' Prime Now delivery to more cities this year. Others, like Costco and Target, are also rolling out grocery-delivery services in hopes of tapping into a growing pool of convenience-minded shoppers.

Prime customers can shop thousands of items across fresh and organic produce, bakery, dairy, meat and seafood, floral and everyday staples from Whole Foods Market available for free two-hour delivery.

The company has rattled the health-care industry in recent weeks, and weighed on the shares of shippers Friday with plans to start a delivery service rivalling United Parcel Service and FedEx Corp. Getting those customers to link Amazon and groceries could further tie it into the nation's shopping habits and give it a bigger chunk of the more than $600 billion USA grocery market. The opportunity is enormous: to make the same waves it made in books and electronics, it would have to persuade millions of customers to start ordering their groceries online.

The survey was done before the Whole Foods acquisition's close and before its products were put on Amazon, so it's possible that adoption has increased even more. Walmart, the country's largest grocer, has aggressively expanded its buy-online-pick-up-in-store option throughout the country and is eyeing same-day deliveries in NY.

Thursday's announcement comes six months after online giant Amazon paid $13.7 billion to acquire more than 400 Whole Foods grocery stores around the country, and it is the latest example of how Amazon plans to bring together the two companies by offering new incentives for members of its Prime membership program, which costs $99 a year. And then there's the issue of keeping cold items cold, and frozen foods frozen.

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While Americans don't necessarily shop at Amazon every week, they buy food every few days.

Despite all the Jeff Bezos-Alexa memes and uncertainty about the future of grocery stores, Amazon's buyout of Whole Foods has proved to be nothing but a good thing.

"There is a lot of runway, and we expect continued Prime penetration with Whole Foods customers", John Blackledge said in a research note.

Buying Whole Foods was the biggest part of a push into physical retail for the chain known for online shopping. "We will use a variety of methods", was all Landry would say. They deliver items for Amazon, Prime Now, grocery delivery service AmazonFresh, Amazon Restaurants and now Whole Foods. "We're going to have a huge expansion ahead", said Landry. Data shows that Whole Foods' brand is one of Amazon's strongest weapons as it tries to take a bigger piece of the grocery pie.