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Aug 21, 10:44 AM
Amazon Deepens Grocery Push With Faster Delivery, Spurs Instacart Downgrade
Stocks
Business

Amazon Deepens Grocery Push With Faster Delivery, Spurs Instacart Downgrade

Authors
  • The Wall Street Journal
  • CNBC
  • TheStreet
13

Amazon.com is accelerating its push into food retail, introducing same-day grocery delivery to roughly 1,000 U.S. cities and cutting the free-delivery threshold for Prime members to $25. The initiative broadens the reach of Amazon Fresh and marks one of the company’s most aggressive moves yet to capture a larger share of the $1.5 trillion U.S. grocery market. A recent pricing analysis shows Amazon’s online grocery baskets averaging just 1% more than Walmart’s and 5% to 13% less than comparable orders at Albertsons, Kroger and Target. The combination of lower prices and faster fulfilment positions the Seattle-based retailer to win customers who have so far relied on regional supermarket chains or third-party delivery platforms. The competitive threat was underscored on Thursday when Wedbush Securities downgraded Instacart to Underperform, slicing its 12-month price target to $42 from $55. The brokerage said Amazon’s wider footprint and improving margins heighten the risk that the delivery app will cede market share and face additional pressure on profitability.

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