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Amazon Extends Two-Hour Whole Foods Delivery Service to LA

Zacks

Amazon.com Inc. AMZN continues to expand its two-hour Whole Food delivery Service. Los Angeles is the latest addition to the list of countries receiving this service.

The service will likely offer food items like dairy, meat and seafood. In addition, the online giant now allows shoppers to order alcohol, including the delivery of beer, wine and spirits, thereby bolstering its food offerings.

Undoubtedly, the new destination will help the company attract more customers to its Amazon Prime program, which is a significant revenue source.

Following the news, Amazon’s share price was up 2.14%. Also, the company has outperformed the industry it belongs to on a 12-month basis. The company’s shares have gained 59.1% compared with the industry’s growth of 43.3%.


Amazon’sTwo-Hour Whole Foods Delivery

This February, Amazon rolled out the two-hour delivery from Whole Foods stores to its Prime members in four cities — Austin, Dallas, Cincinnati and Virginia Beach. Currently, this service is available in seven countries and will continue to expand across the United States.

The company pulls items from Whole Foods stores, bags them but gets the goods delivered by its own drivers. Moreover, the delivery is absolutely free and within twohours. Customers in these cities can order Whole Foods groceries through Amazon’s Prime Now app or website between 8 a.m. to 10 p.m. daily. The items include fresh produce, meat, seafood, flowers and other necessities that the local Whole Foods stores stock.

The two-hour free delivery service has been introduced keeping in mind customers’ demands. Consumers look for convenience and good bargains, and Amazon is focusing on both. Per a Walker Sands survey, 40% consumers would buy groceries online if they were less expensive and 23% would opt for it if it were more convenient.

The move came within a year of the e-commerce giant’s $13.7-billion acquisition of supermarket chain Whole Foods. The deal was certainly a strategic move by Amazon as it immediately gave the latter an access to Whole Foods’ 450 stores across the United States, thus giving it enough power to compete with brick-and-mortar giants like Walmart, Target, Dollar Tree and Dollar General.

Bottom Line

Amazon has been making efforts to bump up its delivery system. From a span of a day to two hours, two hours to 15 minutes, and 15 minutes to two minutes, Amazon has been cutting down on its delivery time for Prime members.

Apart from this, Amazon Prime members already enjoy free two-day and one-day deliveries. Also, Amazon Restaurants offer one-hour delivery for Prime members from popular restaurants. AmazonFresh grocery delivery service can fulfill orders within 15 minutes if users pay $15 per month.

Amazon continues to push advantages to Prime members to boost sales, attract more customers and counter Prime saturation in the United States due to increased penetration rates.

Zacks Rank & Other Stocks to Consider

Amazon sports a Zacks Rank #1 (Strong Buy). Other top-ranked stocks in the technology sector are Stamps.com Inc. STMP, PetMed Express PETS and Agilent Technologies A. While Stamps.com flaunts a Zacks Rank #1, PetMed and Agilent carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings per share growth rate for Stamps.com, PetMed and Agilent is projected to be 15%, 10% and 10.8%, respectively.

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