Amazon is making changes to its Fresh grocery delivery service, announcing that it will start charging delivery fees for orders under $150. The move is intended to help keep prices low for its services, according to a note sent to customers. Beginning on February 28th, Prime members who want home delivery from Amazon Fresh will incur a $9.95 delivery fee for orders under $50, while orders between $50 and $100 will include a $6.95 delivery fee, and orders between $100 and $150 will carry a $3.95 delivery fee.
Previously, Amazon guaranteed members of its $139-a-year Prime service free delivery on Fresh orders over $35. However, the company stated that this service fee will help keep prices low in its online and physical grocery stores, as it will better cover grocery delivery costs and continue to enable offering a consistent, fast, and high-quality delivery experience.
This move comes as Amazon CEO Andy Jassy has embarked on a wide-ranging review of the company’s expenses amid slowing sales and a worsening economic outlook. Amazon has also been looking to lay off 18,000 employees, frozen hiring in its corporate workforce, and paused or canceled some projects such as a sidewalk robot and a telehealth service.
Amazon has previously recalibrated its approach to online grocery deliveries, a business that is notoriously challenging from a cost and efficiency perspective. In 2021, Amazon added a $10 service fee for Whole Foods delivery orders to Prime members, after previously offering them for no extra charge. These changes reflect the company’s efforts to adapt to a changing economic environment and maintain profitability.
