Key Takeaways
- Amazon.com has launched a grocery delivery service for customers in the U.S. who use its Prime service or receive government food benefits.
- The new service will cost $9.95 per month for Prime members and $4.99 for government EBT food benefits customers.
- The new service will deliver grocery orders above $35 from Amazon Fresh, Whole Foods Market, and local grocers and retailers listed on Amazon.com.
- Amazon’s launch is an attempt to take on similar services from Walmart and Target.
Online retail giant Amazon.com (AMZN) on Tuesday announced a new grocery delivery subscription service, available to U.S. Prime customers and recipients of government food benefits.
The new service from Amazon, which was tried out in Denver, Sacramento, and Columbus late last year, aims to compete with rivals Walmart (WMT) and Target (TGT) and their paid membership delivery programs.
What Do You Get With Amazon’s Latest Offering?
By paying $9.99 a month, Amazon Prime members can avail unlimited grocery delivery or pickup on orders above $35 from Amazon Fresh, Whole Foods Market, and a selection of local grocery stores and retailers listed on Amazon.com.
Customers receiving government food benefits with a registered electronic benefits transfer (EBT) card can access the service for $4.99 per month without a Prime membership. The new service is available on a free 30-day trial and will be available across 3,500 cities and towns in the U.S.
How Do Rivals Compare?
By comparison, a Walmart Plus subscription costs $12.95 per month, or can be purchased on a yearly plan for $98. Walmart’s Assist offers 50% off membership for government-subsidized customers, while all members get access to benefits such as savings on fuel for their vehicles and a subscription to the Paramount+ streaming service.
Target’s Circle 360 service costs $99 per year but shoppers can get $50 off the first year.
An analyst note from Wedbush Securities said the move by Amazon should help the company’s broader strategy and allow it to capture market share, “particularly in perishable categories where the company has struggled historically.”
Amazon shares were trading 1.3% higher at $179.57 around 3:40 p.m. ET on Tuesday, with rivals Walmart and Target down 1.9% and 0.9%, respectively.