Amazon Launches Grocery Delivery via Whole Foods

Dallas and Austin first with Amazon Prime Now deliveries from Whole Foods stores

Dallas and Austin first with Amazon Prime Now deliveries from Whole Foods stores

Amazon have announced the start of free two hour delivery of natural and organic food stuffs from Whole Foods through Prime Now.

The new Whole Foods grocery service is made available only for users in Dallas, Virginia Beach, Austin and Cincinnati. An "ultra-fast" one-hour delivery option costs $7.99, again on purchases of $35 and above.

The Amazon/Whole Foods service will be available through its Prime Now program in Austin, Cincinnati, Dallas, and Virginia Beach, VA, starting today, while Target will launch same-day delivery on February 15 in Phoenix, AZ; Tulsa, OK; Oklahoma City, OK; and throughout Texas.

Amazon has been working to integrate with Whole Foods ever since it acquired the grocery giant a year ago, including slashing prices and selling its Echo and Echo Dot devices in stores. The service allows Prime members to select free two-hour shipping on orders of $35 or more. This makes a lot of sense when you think that Amazon accounts for 37% of all online retail sales in the United Kingdom and 57% in America. The orders will then be delivered by Amazon Flex drivers.

The deal sent tremors through the grocery business as analysts predicted Amazon's weight with suppliers could force down already thin grocery margins and accelerate a move to near-instant ordering and delivery.

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Customers can search through the Whole Foods section of the Prime Now website online or on Amazon's mobile apps to select items to order.

This is Amazon's real threat in the space: Its ability to leverage the millions of shoppers who are already Prime members.

The project does three things for Amazon, even if it initially makes no money. In an email sent to Food Dive, Moody's lead retail analyst Charlie O'Shea called this the beginning of Amazon "unlocking" the true value of its acquisition.

It's unclear if Greeley's title will change or whether his appointment will affect Whole Foods CEO John Mackey's role. The first steps that Amazon took were to lower the prices at the notoriously pricey chain and begin displaying and selling its own Echo smart speaker devices in-store.

The Whole Foods Market in Midtown New York is seen on June 16, 2017.

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