Brendan McDiarmid | Reuters
Amazon It will start charging a delivery fee for fresh groceries orders of less than $150, in a move it said will help keep prices for its services down.
Starting February 28, Prime members who want Amazon Fresh home delivery will be charged a $9.95 delivery fee for orders under $50, while orders between $50 and $100 will have a $6.95 delivery fee, and orders between Between $100 and $150 is a $3.95 delivery fee, the company said in a note to customers seen by CNBC. Only Prime members can use the delivery service, though anyone can shop at Amazon Fresh for groceries.
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Amazon Pre-guaranteed Members of its $139 a year Prime Service on fresh orders over $35.
“This service fee will help keep prices lower at online and physical grocery stores, as we better cover delivery costs for groceries and continue to enable the delivery of a consistent, fast, high-quality delivery experience,” the notice read.
The move follows as did Amazon CEO Andy Jassy I embarked on an extensive review on the company’s expenses amid slowing sales and a deteriorating economic outlook. Amazon has laid off 18,000 employees, frozen hiring in the company’s workforce, and paused or canceled some projects such as a sidewalk robot and a telehealth service.
Amazon previously recalibrated its approach to online grocery delivery, a notoriously challenging business from a cost and efficiency perspective. In 2021, Amazon added $10 service fee for Whole Foods delivery orders for Prime members, after being previously offered at no additional charge.
Watch: How Whole Foods has changed in the five years since Amazon took over
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