Amazon rolls back order size for free grocery delivery to $100

Less than a year after increasing its delivery threshold, Amazon on Thursday rolled back its free grocery delivery requirement from $150 to $100 for Amazon Prime subscribers. 

Cutting the purchase threshold for free delivery aims to “make grocery shopping easier, faster, and more affordable for our customers and this enhanced benefit does just that," Amazon said in a statement. 

The latest delivery fee policy is a partial reversal of the Seattle-based retail giant’s decision to significantly raise the purchase threshold in February from orders over $35 to those over $150. 

“We’re always listening to customer feedback and looking for ways to make shopping for groceries easier, faster and more affordable. As part of that, we continuously test our delivery models to see where we can and should make adjustments,” Claire Peters, worldwide vice president of Amazon Fresh, said in an email response to WGB. “Amazon Fresh delivery orders over $100 in the U.S. are now free with Prime membership. Prime membership continues to be an enormous value and this change will save members even more on grocery delivery fees, while also allowing them to enjoy added savings, convenience and entertainment with Prime.” 

Fees for smaller grocery orders will remain the same. Amazon currently charges Prime members $6.95 for orders of $50 to $100 and $9.95 for those under $50. Non-Prime members pay between $7.95 and $13.95 for orders, based on basket size and the delivery window selected. Amazon will also continue charging an additional fee for rush orders.

Amazon Prime members currently pay $139 a year or $14.99 a month.

It’s the second move the company has made on fees in October, according to a Sept. 20 Bloomberg article, which reported that Amazon decided to abandon a planned fee for merchants who choose not to use the online retailer’s shipping service.  

The 2% fee on merchants, announced in August, was supposed to take effect on Oct. 1, but the company axed the plan.

Amazon continues to build a strategy for its Amazon Fresh grocery service, which suffered some setbacks earlier this year, when the company chose not to open dozens of new brick-and-mortar locations across the country.

Amazon CEO Andy Jassy told investors in early August that the company is "taking a thoughtful and disciplined approach" with its move into the grocery business. The company currently operates approximately 44 U.S. Amazon Fresh locations, more than 500 Whole Foods Market stores and roughly 30 Amazon Go convenience stores. 

In early August, Amazon Fresh renovated two of its locations in suburban Chicago, incorporating design elements from its sister company Whole Foods. The company announced in August that it will expand the design overhaul to its locations in Southern California.

Peters wrote in a blog post announcing the renovations that grocery chain also added 1,500 new products, particularly in dairy, snacks, home care, health and baking products.

The changes come as Amazon faces a lawsuit filed on Sept. 26 by the Federal Trade Commission and the attorneys general of 17 states, accusing the company of operating as a monopoly and engaging in anticompetitive practices to gain dominance in the market.  

“Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies,” said FTC Chair Lina M. Khan when the lawsuit was filed. “The complaint sets forth detailed allegations noting how Amazon is now exploiting its monopoly power to enrich itself while raising prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon to reach them.”  

David Zapolsky, Amazon's senior vice president of global public policy and general counsel, refuted the claims in the lawsuit last month, saying the company’s business practices have helped spur competition and better service. 

“If the FTC gets its way, the result would be fewer products to choose from, higher prices, slower deliveries for consumers and reduced options for small businesses—the opposite of what antitrust law is designed to do,” Zapolsky said in September.