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Amazon’s Two-Hour Whole Foods Delivery Expands to New Cities


Amazon.com Inc. AMZN continues to expand its two-hour Whole Food delivery Service. Baltimore, Boston, Philadelphia and Richmond are the latest additions to the list of cities receiving this service.

The service will likely offer natural and organic products like bakery, meat and seafood. In addition, the online giant now allows shoppers to order selected alcohols.

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

Coming to price performance, Amazon has outperformed the industry it belongs to on a 12-month basis. The company’s shares have gained 73.97% compared with the industry’s growth of 37.21%.

Amazon’s Two-Hour Whole Foods Delivery

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

The company pulls items from Whole Foods stores, bags them and gets the goods delivered by its own drivers. Moreover, delivery is absolutely free and within two hours. 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 local Whole Foods stores stock.

The move came within a year of the e-commerce giant’s $13.7 billion acquisition of the 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 the 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. Amazon Restaurants offer one-hour delivery for Prime members from popular restaurants. Amazon Fresh 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

Currently, Amazon sports a Zacks Rank #1 (Strong Buy). Other top-ranked stocks in the same industry include Groupon GRPN, PetMed Express PETS and Expedia EXPE. While Groupon sports a Zacks Rank #1, PetMed and Expedia carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Groupon, PetMed and Expedia is currently projected to be 6.5%, 10% and 14.5%, respectively.

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