Amazon announces the launch of "same-day delivery" in 1,000 cities in the United States, causing stock prices of retailers like Walmart to drop

Amazon plans to significantly expand its grocery delivery business, aiming to increase its coverage to 2,300 cities in the United States by the end of the year.

On August 13, Amazon announced that customers can purchase fresh groceries and enjoy same-day delivery. The expanded service has already covered over 1,000 cities, with plans to extend to more than 2,300 cities in the U.S. by the end of the year.

This service will be offered for free to Prime members, aimed at driving order volume growth and expanding market share. Customers can choose to order fresh produce, dairy products, meat, seafood, baked goods, and frozen foods, all of which can be ordered alongside items that are already available for same-day delivery on Amazon.

As a result of this news, Amazon's stock rose nearly 1.4%, while supermarket and delivery stocks generally fell. The parent company of Insta, grocery delivery platform Maplebear, plummeted 11.5%, DoorDash's stock fell 4%, U.S. retail giant Kroger's stock dropped 4.1%, and Walmart declined 2.53%.

(Amazon rose 1.38%, while supermarket and delivery stocks generally fell, as of the close of U.S. stocks on August 13)

Amazon has been exploring the grocery sector for many years. The company launched its first grocery store on its website in 2006 and acquired Whole Foods Market for $13.7 billion 11 years later. The company has also built physical stores equipped with sensing technology that can detect when customers pick up items and automatically charge them, along with services that allow customers to pay via palm scanning.

Previously, Amazon's grocery business primarily relied on long-shelf-life products such as toothpaste and canned goods that can be stored in warehouses for extended periods. Recently, the company has sought to expand its fresh food business, experimenting with storing produce and other perishable items at its distribution centers.

Strengthening Delivery Network, Intensifying Competition in Grocery Market

Amazon faces fierce competition in the grocery delivery sector.

Amazon announced plans to invest $4 billion to double the scale of its delivery network by 2026.

However, according to eMarketer estimates, Walmart's online grocery sales have surpassed those of Amazon. This large retailer, with thousands of stores and a vast delivery team, can provide same-day delivery service to over 90% of the U.S. population.

To broaden its grocery product range, Amazon is working to expand its same-day and next-day delivery capabilities to a wider geographic area. The newly expanded same-day delivery service covers cities such as Phoenix, Orlando in Florida, and Kansas City in Missouri.

Amazon CEO Andy Jassy told employees two years ago that the U.S. grocery market is worth $800 billion, and he hopes to capture a larger share. According to market research firm IBISWorld, the U.S. grocery industry is valued at nearly $875 billion in 2024 Risk Warning and Disclaimer

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