Amazon Rolling Out Grocery Delivery in More Cities
Forget the drones - the real game-changing concept from Amazon.com (NASDAQ: AMZN) could be grocery delivery. All Things D reported the online retailer has expanded its AmazonFresh grocery delivery service into the San Francisco Bay area.
Amazon has been experimenting with same-day grocery delivery in Seattle for about five years and has been testing the service in Los Angeles for about six month. AmazonFresh involves the use of a distinctive green truck, similar to a UPS van, to deliver a wide variety of items on a same-day basis.
The items delivered include fresh fish and produce, and almost anything available in an Amazon distribution center. To take advantage of the service, customers will have to live near the distribution center and pay a $299 annual fee to Prime Fresh. Items will have to be ordered by 10 a.m. on a weekday for same-day delivery.
This service puts Amazon.com in direct competition with Kroger (NYSE: KR), which has been offering a similar online service, Kroger Home Shop, in many areas of the country for years. Kroger has done very well in the last few years as its TTM revenues grew by nearly $19 billion between October 2010 and October 2013. In October 2010, Kroger had revenues of $80.72 billion, and in October 2013 the company reported revenues of $99.42 billion.
It is not known if other retailers such as Wal-Mart (NYSE: WMT), Safeway (NYSE: SWY), Target (NYSE: TGT) and Costco (NASDAQ: COST) will follow Amazon.com and Kroger into home delivery. If successful, AmazonFresh could be a threat to all of those retailers.
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