Amazon Grocery Delivery Speeds Up as Whole Foods Leads Fresh Push

What happened

Amazon now treats fresh food as the main way into the biggest household spending category it doesn't yet lead. On its third-quarter earnings call on October 29, executives said Whole Foods Market is growing faster than the rest of Amazon's grocery business in both sales and profit. They also named online fresh-food delivery as a major opportunity for further grocery growth11. CFO Brian Olsavsky said grocery is the largest share of household spending Amazon still misses. Winning it, he said, takes a mass-market offering that "starts with perishables"11.

The company followed with holiday promotion. Amazon is advertising a $25 Thanksgiving meal with same-day delivery in the more than 2,300 U.S. cities and towns where it delivers fresh groceries. It also says it has added more than 6,000 items to the service in the past six months18. The offer runs through November 26 and includes an 8-pound turkey along with ingredients for sides and desserts16.

What's new is the structure behind these moves. Whole Foods is now the company's main physical grocery brand. Amazon Fresh is an online-only service. Grocery has been folded into the same same-day logistics network that moves everything else Amazon sells.

The economics: speed as a cost lever

CEO Andy Jassy described faster delivery as a way to cut costs, not just a convenience. He told analysts that faster fulfillment lowers the cost of fresh delivery. He also said Amazon is on track to reduce its cost to serve per unit for the fourth year in a row, which lets it meet or beat competitors' prices on groceries and everyday essentials11. Amazon delivered 1.5 billion items to Prime customers same day or overnight worldwide in the quarter. Most were general merchandise, but Jassy said the speed of the whole network also helps produce and other perishables11.

The demand figures Amazon released all point the same way. Jassy said fresh groceries and everyday essentials grew about three times faster than other parts of the store and made up roughly half of all units sold. Customers who buy perishables with same-day delivery buy nearly seven times more everyday-essential units than those who don't11. Amazon's November announcement said fresh groceries were all 10 of the top sellers on Same-Day Delivery last quarter18. In December 2025, perishables were nine of the top ten1.

These numbers also show why grocery matters beyond food. Jassy said grocery shoppers buy nearly four times more items in non-grocery categories like home and apparel, and spend more than twice as much there11. A weekly order for milk and bananas brings customers back to Amazon often, and that frequency drives the rest of the business. Whole Foods CEO Jason Buechel put it as turning the "everything store" into an "everyday store"19.

How Amazon got here

The current approach comes after years of trial and error. Amazon began grocery delivery in Seattle in 2007 under the Fresh name, bought Whole Foods in 2017, and started opening Amazon Fresh stores in 20206. In January 2026 it announced it would close its Amazon Go and Amazon Fresh stores and convert some of them into Whole Foods locations13. FoodNavigator reports the closures covered 58 U.S. and 19 U.K. Fresh stores in late 2025 and early 2026. Whole Foods, with 549 U.S. stores, became the main physical format11.

The current delivery model started in August 2025. Amazon added perishables to Same-Day Delivery in more than 1,000 cities and towns, with a goal of more than 2,300 by year-end2. That followed pilots in Phoenix, Orlando and Kansas City, where Amazon said many first-time grocery buyers came back twice as often as other shoppers3. The company reached the 2,300 mark in December and said it would keep expanding in 20264. Pricing has stayed the same throughout. Prime members get free delivery on orders over $25 and pay $2.99 below that. Non-members pay $12.996.

Coverage of the rollout agrees on the main facts. Trade, tech and retail outlets all describe temperature-controlled facilities, insulated recyclable bags and a six-point quality check on perishables710. Amazon also says perishable grocery sales grew 30 times during 202578.

Stores still matter, but in a different role

It would be wrong to read this as Amazon giving up on physical grocery. Whole Foods is opening small urban stores called Daily Shop, which range from about 3,330 to 10,000 square feet, compared with roughly 40,000 for a standard store11. Amazon also committed $230 million to higher pay, benefits and education perks for more than 100,000 Whole Foods workers19.

The stores now serve the delivery business rather than compete with it. Whole Foods items, such as its 365 private label, are increasingly sold through Amazon's same-day carts. Amazon also says its same-day fulfillment centers carry tens of thousands of grocery and household items, about four times the full selection of a typical grocery store18.

Amazon is also cutting back on outside partners. TheStreet reports that Amazon is phasing out individual storefronts for third-party grocers on its site. Partners had included Bristol Farms, Cardenas Markets, Weis Markets and Save Mart13. The likely reason is that Amazon would rather own the inventory and the customer relationship than send traffic to other grocers.

Where the story diverges

Amazon's public statements don't fully agree on what customers value most. Jassy's case centers on speed. Buechel said in October that the goal for grocery delivery is reliable delivery rather than raw speed. He also admitted some Amazon store technology got ahead of what shoppers wanted, pointing to the end of palm payments at Whole Foods and the retreat from checkout-free stores19. These views can be reconciled, since a faster network can also be a more reliable one. Still, Buechel's comments are a rare admission that being first with new technology hasn't always won customers.

The pace of expansion is less clear. Amazon promised more same-day grocery coverage in 20261. Yet the city count in its November marketing is still "more than 2,300," the same figure it reported in December 202518. Over the past year, the growth has come from adding products, not new places: more than 6,000 items in six months18. That could change soon. PYMNTS reports that Amazon plans to expand from 85 same-day delivery hubs to as many as 1,000 by 2031. That is a reported plan, not a confirmed one, but it would mark a major build-out16.

Prices give mixed signals. In a basket comparison by Reviewed, Amazon Fresh came in at $86.07 before tip, including a $9.95 delivery fee. Whole Foods via Amazon cost $104.37, and the same items from Wegmans on Instacart cost $96.93 before service fees15. The same test found Instacart often fastest for last-minute orders, while Amazon's delivery windows tend to fill up on weekends15. Amazon's lineup is also complicated. It includes Same-Day Delivery, Amazon Fresh, Whole Foods delivery with two-hour windows, the 30-minute Amazon Now service, and a $9.99-a-month unlimited grocery add-on14. Shoppers have to work out which option fits them.

Why it matters

The biggest competitive threat falls on companies that only do grocery. Wedbush analysts said in December that Amazon's ability to reach both small towns and big cities without third-party platforms puts pressure on Instacart, which depends heavily on grocery delivery subscriptions6. Walmart is a different kind of rival. PYMNTS has noted that Walmart's lead in grocery grew after 2019 even as Amazon nearly doubled its overall share of retail16. Amazon now calls itself the second-largest U.S. grocer18, with more than $150 billion in gross grocery sales in 20251. Being second, however, isn't the same as closing the gap.

Amazon's long-term case depends on a shift that has barely started. Jassy noted that nearly 80% of retail still happens in physical stores and predicted that will eventually reverse in favor of e-commerce11. Grocery is where that reversal is hardest because freshness, timing and trust all matter. Amazon has stopped trying to win grocery with store formats. It is now betting on its delivery network, with Whole Foods supplying the products and Daily Shop stores covering dense cities.

The evidence so far favors that approach. Perishables top Amazon's same-day sales charts, the cost to serve each unit keeps falling, and grocery shoppers spend more across the rest of the store1118. The open question for 2027 is whether the hub build-out reaches the small and mid-sized towns where Walmart is strongest. For now, Amazon's grocery growth is coming from selling more to the same 2,300 places, not from reaching new ones.