Amazon unveils free grocery delivery, but only some Prime members will get it

Amazon Prime members will no longer have to pay $14.99 a month to use Amazon's grocery delivery service, Amazon Fresh.

Amazon announced Tuesday that it is doing away with the monthly fee and offering Prime members a free two-hour shipping service on groceries bought on Amazon Fresh, which includes Whole Foods produce, provided that the shopper spends over the local free delivery threshold. Previously, Prime members had been required to pay the monthly fee for Amazon Fresh on top of their monthly or yearly Prime membership fee.

There is one catch.

Prime members aren't automatically eligible for this new benefit. If you haven't shopped on Amazon Fresh before, you have to request an invitation to join – it's a members' club within a members' club, effectively.

A spokesperson for Amazon would not comment on which of these Prime members would be eligible for the free service or when it would be rolled out to all Prime members.

This change is all part of Amazon's plan to crack the US grocery market and become the go-to place for its most loyal shoppers to stock up on produce.

"Grocery delivery is one of the fastest growing businesses at Amazon, and we think this will be one of the most-loved Prime benefits," Stephenie Landry, VP of grocery delivery, said in a statement to the press on Tuesday.

It has been more than two years since Amazon acquired Whole Foods. Analysts said that it was set to completely upend the US grocery market, but this hasn't happened just yet and experts say it's because the competition has become savvier since then.

"Rather than coming in and dominating online grocery, the threat of Amazon led to competing grocers taking e-commerce seriously and becoming stronger competitors online," Business Insider Intelligence's Daniel Keyes wrote in June.

He continued: "This has prevented Amazon from using Whole Foods to build a position in online grocery that's comparably dominant to the one it holds in overall US e-commerce."

Amazon is now looking to grow its reach beyond Whole Foods and appeal to a new set of customers by launching a new line of grocery stores in the US that would carry a larger variety of food. This would enable Amazon to directly compete with big-box stores such as Walmart, Target, and Kroger.

According to a recent Wall Street Journal report, it has signed leases for more than 12 locations in the Los Angeles area so far.

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