Amazon is putting the brakes on free delivery to many consumers’ homes. The retail giant – which recently announced large-scale layoffs and delayed the opening of several Amazon Fresh stores nationwide – is raising the order threshold for free grocery delivery from $35 to $150.
Starting on Feb. 28, e-comm shoppers who used to enjoy free grocery delivery from Amazon Fresh will now have to pay between $3.95 and $9.95 for that service, depending on their order size and value. In an email to Prime members, the company wrote that the higher fees will “help keep prices low in our online and physical grocery stores as we better cover grocery delivery costs and continue to enable offering a consistent, fast, and high-quality delivery experience.” Amazon also shared that Prime members in some areas can get a reduced fee if they opt for a six-hour delivery window instead of the typical two-hour window.
This isn’t the first time that Amazon has tinkered with fees and delivery service as e-commerce continues to evolve and change with circumstances. In pre-pandemic 2019, Amazon axed its $14.99 monthly fee for Prime members for grocery delivery and went to the $35 order minimum. A year ago, Amazon bumped up the overall fee for Prime members by 17%, from $119 to $139.
The latest pivot reflects Amazon’s effort to navigate the volatile omnichannel marketplace. In December, the retail company announced that it is laying off more than 18,000 employees across several business functions. As it hikes fees and scales back its workforce, the company is also seemingly keeping some of its Amazon Fresh store opening in limbo. Several stores that were constructed and slated to open are still in the dark, according to media reports across the United States.
That said, Amazon’s Whole Foods Market banner continues to expand. A new Whole Foods location in New York City’s financial district was unveiled in January, and a store in Bozeman, Mont., will welcome shoppers on Feb. 1. In a Jan. 13 town hall meeting, Whole Foods Market CEO Jason Buechel shared that company’s 10-year vision, noting that the retailer will grow by strategically increasing and investing profits while focusing on the priorities of creating the best customer experience in stores and online, investing in team member growth and happiness, delivering exceptional business performance and expanding reach to serve customers in new ways. “This is a pivotal moment in time as we turn the page to Whole Foods Market’s next chapter,” Buechel said.
Amazon will release its fourth quarter results for fiscal 2022 on Feb. 2.
The first certified-organic national grocer, Austin, Texas-based Whole Foods has more than 500 stores in the United States, Canada and the United Kingdom. The company is a wholly owned subsidiary of Seattle-based Amazon, which is No. 2 on The PG 100, Progressive Grocer’s 2022 list of the top food and consumables retailers in North America.