Amazon Fresh to Increase Threshold for Free Delivery This February

Amazon Fresh will be charging delivery fees starting February 28th for grocery orders that are less than $150. Despite increasing the threshold for free delivery offerings, Amazon stated that they will be keeping the prices low on their services.

Charging Delivery Fees

In an email sent to Prime members, Amazon announced that the company will start charging grocery orders under $150 starting February 28th. CNBC reported that Amazon will incur a delivery worth $9.95 for orders under $50, $6.95 for orders between $50 and $100, and $3.95 for orders between $100 and $150.

Amazon Fresh delivery is a membership perk for its annual $139 Prime Service subscription. Originally, Amazon only charged members $4.99 for orders under $35 ($50 in New York) or higher, depending on where you lived. Once it exceeds, the delivery will be free.

As per the company, service fee will be added as a way for them to keep the prices lower for their products in Amazon Fresh due to the economic situation. The company noted, "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."

Aside from the delivery fees, PCMag reported that Amazon also increased its Prime membership last year from $119 to $139 annually. Amazon previously charged members $14.99 a month on top of the annual membership. But this charge was eventually scrapped in 2019 and continued with the $35 order minimum.

While this did not last, it may be a better idea to re-institute the subscription fee rather than moving towards the delivery fees. For customers who opted Amazon Fresh for a cheaper price with its previous free deliveries, this might change as it easily became more expensive than it was since its launch.

As per Gizmodo, Amazon Fresh started in 2007 and made an impact on the grocery industry as they pioneered the idea of grocery delivery, which became an increasingly crowded business landscape by looking at startup companies and tech giants that are now doing the same thing.

Online Groceries

SuperMarket News reported the industry for online grocery is decreasing day by day. Especially now that people are shifting from online purchases to retail stores to offline purchases now that the pandemic restrictions have been lifted.

Additionally, customers decided to buy fewer items than usual because of the challenging economic outlook with increasing prices in the market.

According to the Brick Meets Click/Mercats Grocery Shopping Survey in October, online grocery sales totaled $7.8 billion, which declined 3.7% from $8.1 billion a year ago. Meanwhile, September marked a decline of 2.7%.

Brick Meets Click Partner David Bishop explains that these results grew much faster for mass than for grocery versus last year. He added, "Improving the shopping experience is vital for conventional supermarkets' long-term success, as the appeal of shopping online has more to do with convenience than cost."