The Clearing House Real-Time Payments Tracker February 2024 Banner

Prime Members to Test Amazon Grocery Subscription Offering

Amazon is reportedly testing a new grocery subscription service that allows Prime members to pay a separate monthly fee for unlimited grocery delivery on certain orders.

This move is seen as another step in Amazon’s efforts to solidify its position as a go-to destination for grocery shopping, CNBC reported Thursday (Dec. 7).

“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, head of Amazon’s physical stores business, told the media outlet.

The trial service will be available to Prime members in three cities: Denver, Colorado; Sacramento, California; and Columbus, Ohio, according to the report.

For a monthly fee of $9.99, members will have access to free Amazon Fresh and Whole Foods deliveries on orders over $35, the report said. Additionally, they will enjoy the convenience of 30-minute pickup on orders of any size.

Amazon has been adjusting its fee-free grocery delivery threshold for Fresh and Whole Foods orders in recent years, per the report. In October, the threshold for free Fresh grocery delivery was lowered to orders over $100, down from the previous $150, while a $10 service fee for Whole Foods delivery orders was introduced in 2021 for Prime members.

By offering a grocery subscription service, Amazon aims to drive bigger and more frequent food orders among Prime members, according to the report. Since acquiring Whole Foods Market in 2017, the company has been actively expanding its presence in the grocery sector. It has launched its chain of Fresh supermarkets and has been working to integrate its online and brick-and-mortar grocery operations.

This latest move also aligns with Amazon’s strategy to appeal to a broader range of consumers, the report said. Last month, the company opened up Fresh grocery delivery to people without Prime membership across the United States after testing the feature in select cities. This expansion allows Amazon to tap into a larger customer base and compete more aggressively with other grocery delivery services.

Together with that change, Amazon’s plans to overhaul its grocery operations include updated stores and a warehouse automation pilot.