Amazon's Whole Foods Grocery Delivery Is Being Overwhelmed By Demand

For the first time under Amazon's ownership, there is strong evidence that Whole Foods is taking off.

 

Andrew Tseng, The Motley Fool

Mar 19, 2020 

 

As most Americans hunker down at home because of the coronavirus pandemic, Amazon.com's (NASDAQ:AMZN) Whole Foods is seeing overwhelming grocery delivery demand. This shouldn't be shocking, considering that food is a core necessity, and grocery delivery allows customers to avoid entering stores where coronavirus may be present. But it's also being driven by the incredible value proposition of having Whole Foods groceries delivered to Prime members' doors for free.

 

The backstory

 

In Amazon's fourth-quarter earnings release, founder and CEO Jeff Bezos wrote that Prime members "now have free two-hour grocery delivery from Amazon Fresh and Whole Foods Market in more than 2,000 U.S. cities and towns." Delivery through Amazon Fresh had previously cost $14.99 per month, but Amazon dropped the extra charge. The company said grocery delivery orders from Amazon Fresh and Whole Foods Market more than doubled in the fourth quarter year-over-year.

 

Most estimates suggest more than half of U.S. households are Prime members today. That means they are paying $119 per year for Prime member benefits, which include free two-day shipping on millions of items, free one-day shipping on over 10 million items, free same-day shipping on three million items with a $35 minimum order, Amazon Prime streaming video, and unlimited photo storage, among several other perks. When Amazon throws in grocery delivery from Whole Foods for no additional charge for Prime members, that's an incredible value proposition. So it's not surprising it is seeing high demand, especially now.

 

What's happening ...

 

So what? ...

 

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