Whole Foods Bumps Up Delivery Fee in Some Markets

Amazon Prime members must pay like everyone else.

August 05, 2021

Whole Foods

AUSTIN, Texas—Beginning Aug. 30, Whole Foods Market will charge a $9.95 fee in some markets for grocery delivery, and Amazon Prime members, who previously got free delivery on orders over $35, will have to pay as well.

GroceryDive.com reports that the free-delivery perk for Prime members, which rolled out in 2017, aimed to add value to Prime membership and funnel additional shoppers into Whole Foods’ stores and e-commerce services. But during pandemic, Whole Foods delivered three times as many orders as it did in 2019, and Amazon is looking to offload some of its growing operating costs onto shoppers while keeping prices competitive.

The new fee test reflects the tension between promoting online grocery usage to shoppers and funding it. Despite the appeal of free delivery, the service is pricey to operate—even for Amazon—and only faces more cost pressures as retailers adopt more expensive technology, such as automation. A Whole Foods spokesperson said the average basket size has increased this year and that the chain benchmarked its new fee against competing service charges.

As expected, consumers are criticizing the new fee on social media, noting that it removes a key Prime perk at a time when many shoppers rely on home delivery, as the delta variant of the coronavirus has brought a new risk to U.S. citizens, promising to further boost e-commerce use through the summer and into fall.

Two years ago, Amazon eliminated its $15 monthly charge for Amazon Fresh online delivery, and the service remains free through its Fresh stores, as well as its e-commerce platform, if shoppers meet the order threshold.

Amazon said it will be closely watching how consumers respond to the fee. The company may be hoping that eliminating free delivery will push more Prime members to explore the chain’s physical stores. Foot traffic at the grocer has been slow to rebound from the pandemic’s early days, but Amazon’s latest earnings report showed an 11% increase in physical store sales, the majority of which are Whole Foods stores.

Delivery remains a key service when it comes to attracting customers. To learn more, read “Covering the Last Mile” in NACS Magazine.