SAN FRANCISCO – Add two more areas where Amazon can get you your Whole Food fix in under two hours — Atlanta and much of the San Francisco Bay area.
Beginning Tuesday, Amazon is rolling out free, two-hour delivery from its Whole Foods stores to Prime members in Atlanta and San Francisco for all orders over $35. For those in a hurry, one-hour delivery is available for a $7.99 charge.
The San Francisco area is quite large, covering parts of the East Bay (Berkeley and Oakland) and Silicon Valley as far south as Apple’s hometown of Cupertino.
That’s in addition to Austin, Dallas, Cincinnati and Virginia Beach, Va., where the service has been available for almost a month. More cities are expected to be added over the course of the year.
In San Francisco, customers will be able to also order beer, wine and spirits, depending on the liquor license of the local Whole Foods store that is fulfilling their order.
That service not available in Georgia due to state regulations. In Texas, only beer with an alcohol content by volume of under 5% can be delivered.
It’s part of Amazon’s broader move into the grocery business, which was turbocharged last year when it bought Whole Foods Market for $13.7 billion.
The free service is available to subscribers to Amazon’s $99-a-year Amazon Prime delivery service. As in the other cities, it will be available during the hours the local Whole Foods stores are open, generally 8 a.m. to 10 p.m.
The announcement is the latest in Amazon's integration of the chain of high-end organic supermarkets.
While the additions represent a 30% increase in the cities where Amazon offers free Whole Foods delivery, grocery delivery overall is still a tiny proportion of total U.S. grocery sales, cautions Moody’s lead retail analyst Charlie O’Shea.
“Delivery is really, really niche. It’s a small customer base when you look at it relative to total food sales,” he said.
Exact numbers are difficult to get, but O’Shea guesses grocery delivery is probably under $2 billion annually, compared with $800 billion for the U.S. grocery market.
Even so, it’s another chance for Amazon to stake out a place in a new market and gather as much intelligence as possible in that market while it does so.
Unlike other retailers, Amazon’s has the luxury of not having to make a profit while it works out the kinks because its stockholders have long shown that they’re profit-agnostic when it comes to the Seattle behemoth, O’Shea said.