August 21, 2025
Amazon’s expansion into same‑day perishable delivery reshapes the competitive landscape. Here’s our take on threats and likely moves for each of the six largest U.S. grocers:
Walmart
Threat: Amazon challenges Walmart’s grocery-as-loyalty model. First impact will be on convenience–next will be on value, which hits at the heart of Walmart
Likely Move: Aggressively match prices, waive fees, and enhance Walmart+.
Kroger
Threat: Delivery zones overlap heavily in urban/suburban markets.
Likely Move: Strategic review of where Ocado delivery enhances overall profitability, then go big or go home.
Costco
Threat: Minimal given Amazon’s focus on convenience, potential degradation of basket size.
Likely Move: Promote quality and value, highlight bulk delivery and expanded member benefits
Albertsons
Threat: Amazon targets metros where Albertsons has limited density.
Likely Move: Emphasize local fresh quality and hybrid pickup/delivery.
Publix
Threat: Amazon pushes into suburban households in Publix’s Southeastern base.
Likely Move: Double down on service culture and freshness guarantees (Amazon can’t deliver a PubSub).
Target
Threat: Shipt delivery, once a differentiator, becomes table stakes
Likely Move: Enhance Drive Up and same-day grocery delivery integration with Target-only house brand offerings.
While focus has been on the impact to grocers, the more immediate pain will be felt with retailers who previously cornered the market on last-minute convenience: drug stores. Amazon is eroding the traditional ‘convenience premium.’
In the pre-COVID days, consumers paid more at CVS or Walgreens for immediacy; today, there’s an app for that. Erosion of pharmacy profitability and a larger-than-necessary footprint (both store format and number of locations) likely means even more corners available for car washes.
