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Logistics & Fulfilment

Amazon drops grocery delivery fees in the US

Amazon has a new plan to try and jumpstart its grocery delivery business: cut some fees for its Prime members in the US. It is also seeking to make shopping easier by combining Amazon Fresh and Whole Foods Market ordering on a single site.

The move is an attempt to compete for the fresh food market with rivals such as Walmart and Kroger, both of whose shares dropped on the Amazon announcement.

The US online retailer has announced that it will no longer charge US$15 a month for its Amazon Fresh service for subscribers of its Prime membership, which costs US$119 a year. At least US$35 must be spent to qualify for free delivery in two hours.

Amazon suggests a US$5 tip for the delivery workers, but tipping is optional. Delivery is still a tiny part of the US$740 billion ($1.1 trillion) grocery market, partly because “most people want to inspect eggs and squeeze avocados themselves”, the Associated Press reports.

In Australia, Amazon offers a range of pantry staples, such as breakfast cereal, that are eligible for free delivery through Prime, but has not yet ventured into fresh food.

However, Coles recently started offering free delivery on a range of fresh and frozen food to eBay Plus subscribers.

The supermarket first launched food on eBay in March, and in September, it expanded its range to include staples like bread and milk and added new delivery windows.

“By introducing Coles’ fresh and frozen products, we’re giving our customers the convenience they’re seeking and making it a one-stop-shop,” a spokesperson for Coles said at the time.

Coles on eBay is currently available to consumers living in metropolitan areas, including Sydney, Melbourne, Brisbane, Adelaide and Perth.

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