October 16, 2025 • 5 mins
Amazon has been scaling up its same-day grocery delivery services across cities all over the US.
It's looking to expand to 2,300 US cities by the end of the year, and investors are speculating about what it could mean for the market.
Sam Dickie from Fisher Funds explained further.
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Speaker 1 (00:09):
You're listening to a podcast from News Talks B Follow
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Speaker 2 (00:16):
Amazon has been massively scale scaling up its same day
grocery delivery over the last few months, looking to be
in about two and a half thousand US cities by
year end. It's a strategic assault on our grocery market
worth nine hundred billion dollars. Sam Dicky from Fisher Funds
is with us to talk us through this.
Speaker 3 (00:33):
Hey, Sam, good eating here.
Speaker 1 (00:36):
Sam.
Speaker 2 (00:36):
How does Amazon's move change the competitive landscape?
Speaker 3 (00:38):
Do you think, Well, it's nailed everything else, hasn't It
nailed the same day delivery of books in CDs, through
the iPhones and everything in between. In grocery is the
holy grail, partly because of the size of the market,
like you said, nine hundred billion, but partly because it's
the ultimate repeat purchase. We've all got to eat and
it's been really hard. So delivering fresh groceries on the
(01:01):
same day requires a really expensive, dense network of specialized
refrigerated facilities, and this stuff perishes, so it has to
be perfect. And we you and I have ultra low
tolerance for soggy tomatoes, so we'd rather just go to
the grocery store if it's not good enough, And the
other thing is picking and packing the groceries can cost
a grosser nine bucks, So if you think about it
(01:23):
on one hundred dollars average basket size in the US,
that leaves no profit margin. So same day delivery as
a game changer. It more or less replicates that instant
gratification that you and I get when we go to
the supermarket.
Speaker 2 (01:36):
Now, what do you think this is going to mean
for the traditional supermarket chains and the smaller regional players
and everybody who's already doing this stuff.
Speaker 3 (01:43):
Well, Wall Street is describing the situation as guerrilla warfare,
and so Amazon is leveraging it's sort of massive one
kart advantage of it these other guys. So the consumers
can buy three hundred and fifty million other Amazon products
and their groceriy. So this is kind of devastating to
companies like Instacart who just deliver groceries, or supermarket Kroger
(02:07):
who just sell groceries. They can't leverage that other scale
of buying all the other electronics alongside it, So they
what does that mean? It means they can't match Amazon
on price, and already since this happened a couple of
months ago, Amazon's prices are seven percent below Walmart, sixteen
percent below Kroger, and seventeen percent cheaper than Alberson's, which
is another supermarket chain. And so far, so good, too sore,
(02:31):
these low prices are meaning they're taking volume market share.
So early pilots show that seventy five percent of users
were first time Amazon grocery buyers, so they've been buying
from someone else before and they will return twice as often,
so they're using that massive scale to take market share
as well.
Speaker 2 (02:47):
Now you've already got players doing grocery delivers as well
or food deliveries. You've got Uber Eages, you got Instacart,
all Dash and so on. So what about them?
Speaker 3 (02:56):
Yeah, well Instacart sort of fell out of bed on
the day this was announced and hasn't recovered since because
they're doing nothing but just delivering groceries and that that
is a tough, low margin business, particularly when you can't
leverage all those other products across it as well, like
Amazon is now Instacart and sorry door Dash and Uber Eats.
They obviously dominated the delivery of takeaways as being no
(03:17):
issue there, but they had both expanded into into grocery
delivery to sort of further bolster their revenues. But here's
the rub that they're just into meteries charging grocers sort
of fifteen to twenty five percent commissions, while Amazon is
the platform, the logistics network, and often the the product
grocery supplier as well. So door Dash and Uber Eats
(03:37):
can't compete with that scale and full integration of Amazon.
Speaker 2 (03:40):
Right, So what do you reckon? This means for investors? Sam?
Speaker 3 (03:44):
I think it competitors without that scale, and it seems
like the holy Grail is finally being found or cracked.
Competitors without that scale, So Instacart, regional grosers that they
will bleed and it's good for consumers of course over there.
I mean, groceries are just going to get cheaper. And
the other thing is you should look for, and we've
seen this in Europe is these smaller grosers and regional
(04:07):
grosers even national growth. As they face margin pressure, you'll
see more sort of companies taking over other companies. And
we saw that in Europe when that sort of grocery
delivery market took off. Grocery m and a or mergers
and acquisitions are up thirty one percent since then. And
as always, the other thing is Amazon's actually playing a
different game. It's not really that interested in the grocery
(04:28):
margin itself. The kicker here is that Prime members, of
which there's sort of two hundred million households in the
US who are Prime members who pay one hundred and
thirty nine bucks a year for all the Prime benefits,
so the video, but also free free delivery, etcetera. They
get free same day grocery delivery. So this is really
the game for Amazon here is about locking those really
(04:50):
valuable members in and making them stickier, and in the
process they're going to sort of destroy a few grocers
along the way.
Speaker 2 (04:57):
Interesting stuff. Hey, thank you very much.
Speaker 3 (04:59):
Sam.
Speaker 2 (04:59):
We'll talk to you in a week's time.
Speaker 3 (05:00):
Sam Dickey A Fisher funds.
Speaker 1 (05:01):
For more from News Talks that'd be listen live on
air or online and keep our shows with you wherever
you go without podcasts on iHeartRadio
You're listening to a podcast from News Talks B Follow
this and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:16):
Amazon has been massively scale scaling up its same day
grocery delivery over the last few months, looking to be
in about two and a half thousand US cities by
year end. It's a strategic assault on our grocery market
worth nine hundred billion dollars. Sam Dicky from Fisher Funds
is with us to talk us through this.
Speaker 3 (00:33):
Hey, Sam, good eating here.
Speaker 1 (00:36):
Sam.
Speaker 2 (00:36):
How does Amazon's move change the competitive landscape?
Speaker 3 (00:38):
Do you think, Well, it's nailed everything else, hasn't It
nailed the same day delivery of books in CDs, through
the iPhones and everything in between. In grocery is the
holy grail, partly because of the size of the market,
like you said, nine hundred billion, but partly because it's
the ultimate repeat purchase. We've all got to eat and
it's been really hard. So delivering fresh groceries on the
(01:01):
same day requires a really expensive, dense network of specialized
refrigerated facilities, and this stuff perishes, so it has to
be perfect. And we you and I have ultra low
tolerance for soggy tomatoes, so we'd rather just go to
the grocery store if it's not good enough, And the
other thing is picking and packing the groceries can cost
a grosser nine bucks, So if you think about it
(01:23):
on one hundred dollars average basket size in the US,
that leaves no profit margin. So same day delivery as
a game changer. It more or less replicates that instant
gratification that you and I get when we go to
the supermarket.
Speaker 2 (01:36):
Now, what do you think this is going to mean
for the traditional supermarket chains and the smaller regional players
and everybody who's already doing this stuff.
Speaker 3 (01:43):
Well, Wall Street is describing the situation as guerrilla warfare,
and so Amazon is leveraging it's sort of massive one
kart advantage of it these other guys. So the consumers
can buy three hundred and fifty million other Amazon products
and their groceriy. So this is kind of devastating to
companies like Instacart who just deliver groceries, or supermarket Kroger
(02:07):
who just sell groceries. They can't leverage that other scale
of buying all the other electronics alongside it, So they
what does that mean? It means they can't match Amazon
on price, and already since this happened a couple of
months ago, Amazon's prices are seven percent below Walmart, sixteen
percent below Kroger, and seventeen percent cheaper than Alberson's, which
is another supermarket chain. And so far, so good, too sore,
(02:31):
these low prices are meaning they're taking volume market share.
So early pilots show that seventy five percent of users
were first time Amazon grocery buyers, so they've been buying
from someone else before and they will return twice as often,
so they're using that massive scale to take market share
as well.
Speaker 2 (02:47):
Now you've already got players doing grocery delivers as well
or food deliveries. You've got Uber Eages, you got Instacart,
all Dash and so on. So what about them?
Speaker 3 (02:56):
Yeah, well Instacart sort of fell out of bed on
the day this was announced and hasn't recovered since because
they're doing nothing but just delivering groceries and that that
is a tough, low margin business, particularly when you can't
leverage all those other products across it as well, like
Amazon is now Instacart and sorry door Dash and Uber Eats.
They obviously dominated the delivery of takeaways as being no
(03:17):
issue there, but they had both expanded into into grocery
delivery to sort of further bolster their revenues. But here's
the rub that they're just into meteries charging grocers sort
of fifteen to twenty five percent commissions, while Amazon is
the platform, the logistics network, and often the the product
grocery supplier as well. So door Dash and Uber Eats
(03:37):
can't compete with that scale and full integration of Amazon.
Speaker 2 (03:40):
Right, So what do you reckon? This means for investors? Sam?
Speaker 3 (03:44):
I think it competitors without that scale, and it seems
like the holy Grail is finally being found or cracked.
Competitors without that scale, So Instacart, regional grosers that they
will bleed and it's good for consumers of course over there.
I mean, groceries are just going to get cheaper. And
the other thing is you should look for, and we've
seen this in Europe is these smaller grosers and regional
(04:07):
grosers even national growth. As they face margin pressure, you'll
see more sort of companies taking over other companies. And
we saw that in Europe when that sort of grocery
delivery market took off. Grocery m and a or mergers
and acquisitions are up thirty one percent since then. And
as always, the other thing is Amazon's actually playing a
different game. It's not really that interested in the grocery
(04:28):
margin itself. The kicker here is that Prime members, of
which there's sort of two hundred million households in the
US who are Prime members who pay one hundred and
thirty nine bucks a year for all the Prime benefits,
so the video, but also free free delivery, etcetera. They
get free same day grocery delivery. So this is really
the game for Amazon here is about locking those really
(04:50):
valuable members in and making them stickier, and in the
process they're going to sort of destroy a few grocers
along the way.
Speaker 2 (04:57):
Interesting stuff. Hey, thank you very much.
Speaker 3 (04:59):
Sam.
Speaker 2 (04:59):
We'll talk to you in a week's time.
Speaker 3 (05:00):
Sam Dickey A Fisher funds.
Speaker 1 (05:01):
For more from News Talks that'd be listen live on
air or online and keep our shows with you wherever
you go without podcasts on iHeartRadio
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