Stocks tied to supermarket operators and delivery platforms moved lower Tuesday after Amazon disclosed a substantial expansion of its grocery operations. Kroger shares declined 1.6% and Instacart fell 5% following the announcement, while other delivery and retail names also slipped - Uber dropped 2.5%, DoorDash lost 1.8%, and Walmart eased 1%.
Amazon said it will extend its Same-Day Delivery service for fresh groceries to additional communities in 2026, citing strong customer feedback. The company reported that perishable grocery sales through the Same-Day service have expanded 40x since January 2025.
In parallel with the delivery push, Amazon plans to open more than 100 new Whole Foods Market stores over the next few years. At the same time the company intends to close its Amazon Go and Amazon Fresh physical stores, and it said some of those locations will be converted to Whole Foods outlets.
The company framed its grocery footprint as large and growing, noting it has become one of the top three grocers in the U.S., with more than $150 billion in gross sales and upward of 150 million customers purchasing groceries annually. Amazon also said everyday household essentials now account for one out of every three units sold on Amazon.com.
Amazon is testing an ultra-fast delivery option called Amazon Now, designed to deliver thousands of essential items including fresh food to customers in roughly 30 minutes or less. The firm also highlighted expansion of Whole Foods Market Daily Shop, a smaller-format store designed to offer grab-and-go meals and everyday essentials.
Market participants reacted to the announcements by pricing in heightened competition for traditional supermarkets and third-party delivery platforms. The company’s combination of rapid delivery experimentation, a growing Same-Day channel for perishables, and planned expansion of the Whole Foods banner represents a broader intensification of competitive pressure across grocery retail and food-delivery markets.
Key takeaways
- Amazon is expanding Same-Day Delivery for fresh groceries and reports perishable sales via that channel have grown 40x since January 2025.
- The firm will open over 100 new Whole Foods Market stores while closing Amazon Go and Amazon Fresh physical stores, with some conversions to Whole Foods.
- Following the announcement, Kroger, Instacart, Uber, DoorDash, and Walmart all saw share price declines.
Risks and uncertainties
- Intensified competition in grocery retail and delivery could pressure sales and market share for traditional supermarket chains and delivery platforms.
- The conversion of Amazon Go and Amazon Fresh locations to Whole Foods stores creates uncertainty for incumbents operating in the same local markets.
- Rapid expansion of ultra-fast delivery options and Same-Day perishables could alter customer expectations and competitive dynamics in grocery fulfillment.