Amazon, Whole Foods launch two-hour grocery delivery

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Starting Thursday, Prime subscribers in four cities can get free two-hour delivery on thousands of Whole Foods items.

While the service is only available in Austin, Cincinnati, Dallas, and Virginia Beach for now, Amazon plans to expand the Whole Foods Prime Now service across the country over the course of the year.

While it's free to receive your groceries in two hours, if you're in a rush to scarf something down, you can pay $7.99 to rush-deliver your groceries in one hour flat, on orders of $35 or more.

This marks the first major integration between Amazon's e-commerce operations and its acquisition of Whole Foods.

Picking Dallas as a starting point, Amazon is going up against its largest competitors in the grocery business, including Walmart, the largest US grocer, and Kroger, the largest traditional supermarket chain.

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Those familiar with the service may have already purchased Whole Foods' private label, Everyday Value 365, which is already available on Prime Now in many markets. And last week, Amazon announced that its flash-deal-dispensing Treasure Truck vans would make stops at Whole Foods locations. With Amazon jumping in as well I know which one I'd use if I decide to grocery shop from home. So delivering Whole Foods makes sense since the majority of the infrastructure is already in place. Amazon hasn't disclosed the number of Prime members, but market research firm CIRP estimates it to be over 90 million in the US alone.

In this way, Amazon Prime members are now able to order groceries, and they can get their packages within one or two hours.

Amazon dropped rates on few things at the 457 Whole Foods markets in the United States after the contract concluded. Consumers say they would purchase more groceries online if it was less expensive (40%) and if delivery times were more convenient (23%), according to the Walker Sands report.

Those integrations are all on the brick and mortar side, so today's integration offers a different angle that could boost the Whole Foods' business. Since then, the companies have introduced Amazon lockers in Whole Foods Market stores. "You can't do that with perishable fresh items (especially with flex drivers using their own vehicles without refrigeration)".

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