Amazon’s Prime Grocery Power Play: A Direct Shot Across the Competition’s Bow

Amazon just loaded the chamber in the grocery wars—and they’re aiming straight at rivals’ market share.

The Prime Advantage: More Than Just Free Shipping

Forget loyalty programs. Amazon’s weaving grocery discounts into Prime like a blockchain protocol baking incentives into its tokenomics. Suddenly, that $139/year membership looks like a leveraged long on household savings.

Wall Street’s Hungry (For Someone Else’s Lunch)

Analysts predict this move could carve out 15% of traditional grocers’ revenue—about as gentle as a Bitcoin correction wiping out weak hands. Meanwhile, Amazon’s stock ticker might as well be a grocery scanner ringing up investor enthusiasm.

The Cynical Take

Another 'disruptive' play that’s really just a land grab—because nothing says innovation like using your balance sheet as a blunt weapon. At least crypto markets admit they’re volatile.

Key Takeaways

• Amazon said Wednesday that it is expanding same-day grocery delivery by adding dairy, meat, produce and other perishables.
• The move comes after the company said it is building out its same-day and next-day delivery network in smaller towns and rural areas.
• Shares of Instacart, DoorDash, Walmart and other major supermarkets fell.

Amazon is rolling out full-service grocery delivery. The news quickly ricocheted through the market, hitting shares of a range of competitors.

Beginning Wednesday, the retailer will offer same-day delivery on thousands of grocery items, including dairy, meat, seafood and produce, in 1,000 locations, it said in a press release. Amazon (AMZN) aims to extend the service to a total of 2,300 towns and cities by the end of 2025, the company said.

“We’re continuously innovating to make grocery shopping simpler, faster, and more affordable for our customers,” Doug Herrington, CEO of Worldwide Amazon Stores, said in a statement. 

Amazon is waiving the delivery fee Prime members pay orders over $25. Walmart (WMT) and Target (TGT) offer free same-day delivery to members when they spend $35 or more, according to their websites. (Amazon Prime members can get same-day delivery on smaller orders by paying $2.99, and all customers can access the service for $12.99, its press release said.)

Amazon’s announcement amounts to a “shot heard 'round the warehouse,” Wedbush Securities wrote in a research note. The bank added that the MOVE could weigh on delivery companies and retailers that have large grocery businesses. 

Shares of Grocery and Delivery Companies Sink

Investors sold off shares of delivery and supermarket companies Wednesday.

Instacart (CART) shares were recently down 12%, while DoorDash (DASH) shares fell some 5%, Kroger (KR) shares dropped 4%, Walmart and Albertsons Companies (ACI) shares dipped about 2%.

“Along comes Amazon with an existing nationwide network of fulfillment centers and delivery trucks, [and] seems to have finally figured out how to store and fulfill perishables in a way to support same-day efforts,” Wedbush analysts said.

Amazon has struggled to break into the perishable space despite introducing a grocery-specific subscription option, analysts said. It also announced plans to offer same-day and next-day delivery in thousands of less populated areas, which Morgan Stanley described as seizing an opportunity to close the urban-rural gap in online food shopping.

Amazon shares were recently up more than 1%.