Grocery Stocks Sink as Amazon Expands Same-Day Delivery to 1,000 Cities
TradingKey - E-commerce giant Amazon formally announced on August 13 a major expansion into U.S. fresh grocery delivery, launching same-day service covering over 1,000 cities and towns for perishable categories including seafood, meat, and frozen foods. The company plans to extend coverage to over 2,300 regions by the end of 2024.
The new Fresh same-day service allows customers to consolidate perishable groceries with same-day eligible items (electronics, books, etc.) in a single order for delivery within hours—all free for Amazon Prime members.
Following the announcement, Amazon shares rose 1.43% while major U.S. grocery and delivery stocks declined sharply: Instacart plunged over 10%, DoorDash fell 5%, BJ’s Wholesale Club dropped 4.14%, and traditional retail giants Kroger and Walmart also slid.
Source: Google Finance
Amazon’s grocery ambitions span over a decade of experimentation: testing online grocery stores in 2006, acquiring Whole Foods Market for $13.7 billion in 2017 to enter physical retail, and recently retrofitting distribution centers to enhance perishable storage capacity.
In late April, Amazon pledged $4 billion by 2026 to expand rural logistics networks in the U.S., targeting same-day and next-day coverage for 4,000+ rural communities by year-end—laying critical groundwork for fresh grocery delivery.
The company is also deepening AI integration across its supply chain. Generative AI mapping technology Wellspring integrates satellite imagery and road networks to optimize delivery routes and address accuracy. Robotics AI agents leverage vision-language models for natural language command execution, enabling autonomous warehouse coordination and further shortening order processing time
Amazon’s established logistics infrastructure positions it for profitable growth in groceries that pure-play online grocers struggle to achieve, noted Neil Saunders, Retail Analyst at GlobalData Retail.
This expansion underscores Amazon’s long-standing pursuit of the $800 billion U.S. grocery market. CEO Andy Jassy explicitly stated two years ago: "Amazon wants a larger slice of this massive market."
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