Brendan McDermidt | Reuters
Amazon It will begin charging a delivery fee for new grocery orders under $150, which it said will help keep the costs of its services low.
Starting Feb. 28, Prime members who want home delivery from Amazon Fresh will pay a $9.95 delivery fee for orders under $50, and a $6.95 delivery fee for orders between $50 and $100, the company said in a note to customers seen by CNBC. Only Prime members can use the delivery service, though anyone can shop at the Amazon Fresh grocery store.
Amazon Previously guaranteed Its members get $139-a-year Prime service with free delivery on new orders over $35.
“This service fee will help keep prices low at our online and physical grocery stores as we better cover grocery delivery costs and continue to deliver a consistent, fast and high-quality delivery experience,” the announcement said.
The move comes to Amazon CEO Andy Jassy embarked on a broad review Company costs amid low sales and poor economic outlook. Amazon has laid off 18,000 employees and frozen hiring across its corporate workforce, and suspended or canceled some projects, such as a walking robot and a telehealth service.
Amazon has previously revamped its approach to online grocery delivery, a notoriously challenging business from a cost and efficiency perspective. In 2021, Amazon was added $10 service fee for Whole Foods delivery orders for Prime members, after previously served at no additional charge.
See: Here’s how Whole Foods has changed in the five years since Amazon took over