Brendan McDermid | Reuters
Amazon will start charging delivery fees for Fresh grocery orders that are less than $150, in a move it said will help keep prices low on its services.
Beginning Feb. 28, 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, the company said in a note to customers viewed by CNBC. Only Prime members can use the delivery service, although anyone can shop at an Amazon Fresh grocery store.
Amazon previously guaranteed members of its $139-a-year Prime service free delivery on Fresh orders over $35.
“This service fee will help keep prices low in our online and physical grocery stores as we better cover grocery delivery costs and continue to enable offering a consistent, fast, and high-quality delivery experience,” the notice stated.
The 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 eyed laying 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.
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