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MarketWatch reports that Amazon "is eliminating its $14.99-per-month fee for grocery delivery, making delivery from Amazon Fresh and Whole Foods Market one more perk included in Prime membership."

"Grocery delivery is available across 2,000 cities and towns that range in size from dense urban areas to more sparsely populated locations. One- and two-hour delivery windows are available in most cities, and the e-commerce giant said it will be expanding that geographically as well."

A minimum purchase of $35 is required to avoid delivery fees. Prime membership costs
$119 a year.

Stephenie Landry, vice president of grocery delivery, describes the move as "a game-changing offer that members will come to value as a key part of Prime membership."

Landry also called grocery delivery “one of the fastest-growing businesses at Amazon," though when "asked for metrics to quantify the growth, Landry didn’t comment, only saying the company thinks we’re 'at a turning point for fresh groceries,' in terms of customers’ growing willingness to order groceries online and have them delivered."

In its story, the New York Times writes: "With its new announcement, Amazon is showing it is willing to spend heavily on delivery where its competitors have not, and make up the costs through other purchases made by Prime members, to undercut the value traditional grocers have been offering.

"Amazon has made fast delivery a key to driving more retail sales. Last week, Amazon already said it expected to spend about $1.5 billion this quarter on one-day shipping for Prime customers, and it is now adding free grocery delivery within two-hours to its spending spree. They are long-term bets that Amazon can change customer behavior and expectations in ways that will create more loyalty for Prime customers, who buy more, and more frequently, than non-Prime customers."
KC's View:
It is just like Amazon to double-down on its strategy. Last week, when it said that its quarterly sales were up but profits were down, it was largely because it has spent so much money moving Prime deliveries from two days to one day … and now, just days later, it makes a move that inevitably will require even more investment.

I'll be curious to see if this is a harbinger of what Amazon decides to offer when it opens the new chain of grocery stores later this year. The betting here is that it is.