ALEXANDRIA, Va.—Amazon is implementing new delivery fees on Amazon Fresh grocery orders, with the company saying the charges will help keep prices low on its services, reports CNBC.
Beginning on February 28, a $9.95 fee will be added to Amazon Fresh grocery delivery orders that are less than $50, while orders between $50 and $100 will include a $6.95 delivery fee, and orders between $100 and $150 will incur a $3.95 delivery fee.
“This service fee will help keep prices low in our online and physical grocery stores as we better cover grocery delivery costs and continue to enable offering a consistent, fast, and high-quality delivery experience,” stated Amazon.
Amazon used to offer grocery deliveries for free on orders above $35 for Amazon Prime members. It also added a $10 fee to Whole Foods grocery deliveries in 2021.
CNBC reports that the new fees come amid Amazon’s review of expenses, as sales slow and the economy worsens. Amazon has laid off more than 18,000 employees, frozen hiring in its corporate workforce and paused or canceled some projects, such as an autonomous delivery robot and a telehealth service.
The Wall Street Journal has reported that food-delivery apps are facing slow growth.
Apps such as DoorDash, Uber Eats and Grubhub were used heavily by consumers during the pandemic, when eateries were closed to inside patrons. But now that the pandemic has waned and rising prices weigh on the American consumer, it’s not clear whether consumers will consider food delivery a luxury or a necessity.
With consumers demanding faster service and a reduced-friction way to get their essential goods, Walmart, Albertsons and Aldi, among many others, are offering fast delivery and pick up on certain convenience items in order to gain more market share and win smaller basket trips from consumers that shop convenience stores.
According to NACS’ “Last Mile Fulfillment in Convenience Retail” report, 61% of retailers are satisfied with their third-party delivery partners, but concerns include high fees, little access to consumer data, difficulties delivering age-restricted products and service and operational issues.
Read more about what c-stores are doing to make delivery work for their businesses.