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Amazon said the service fee will better cover grocery delivery costs and help keep prices low in its online and physical grocery stores.

Amazon hikes grocery delivery fees for Prime members

The benchmark for free delivery increases from over $50 to more than $150

Amazon will begin charging a grocery delivery fee for its Prime customers on orders under $150, effective February 28.

The retailer, which currently offers Amazon Prime members free delivery on orders over $50, will reportedly institute charges of $3.95 for orders between $100 and $150; $6.95 for orders between $50 and $100; and $9.95 for orders under $50.

Amazon said the service fee will better cover grocery delivery costs and help keep prices low in its online and physical grocery stores.

The changes come at a time when Amazon Prime membership growth is reportedly stagnant. Amazon said in 2021 that it had more than 200 million Prime members worldwide, compared to more than 150 million at the end of 2019. But Consumer Intelligence Research Partners, a consumer insights firm that tracks Amazon, said that Prime membership “has essentially stopped growing in the US, after many years of extremely fast growth, and then modest growth in the last two or three years.”

The fee revision is just the latest Amazon Prime-related pricing change. In October 2021, Amazon instituted a $9.95 fee for Whole Foods Market delivery orders chainwide, with additional rush fees for one-hour delivery orders. Amazon Prime members previously received free two-hour delivery of groceries on orders of at least $35.

Amazon’s pricing adjustment also follow reports that openings of new Amazon Fresh grocery locations is tapering.

Nevertheless, Amazon still is taking steps to make its Prime membership more appealing.

Last week, Amazon launched its RxPass initiative which gives Prime members low-cost access to medications. The program from Amazon Pharmacy covers commonly prescribed generic medications that treat more than 80 common health conditions, including high blood pressure, anxiety, and acid reflux.

Members can receive all eligible medications for a monthly fee of $5 with free delivery.

In November, Amazon announced it was increasing the number of free songs available through Amazon Music from 2 million to 100 million and providing access to the most ad-free on demand podcasts.

In addition, Amazon last year began offering Prime members a free, one-year Grubhub+ membership with no food-delivery fees on eligible orders. The perk is available in more than 4,000 cities with hundreds of thousands of restaurants across the country.

Amazon Prime members pay $14.99 per month or $139 per year to receive such additional benefits as free two-day shipping from Amazon Pharmacy; in-store savings on select groceries at Amazon Fresh and Whole Foods Market stores; free delivery on millions of Amazon items; unlimited streaming of movies; and live sports.

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