October 16, 2025 • 4 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 (00:00):
Amazon has been massively scal 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 a grocery market
worth nine hundred billion dollars. Sam Dicky from Fisher Funds
is with us to talk us through this. Hey Sam,
good eating, He Sam. How does Amazon's move change the
(00:21):
competitive landscape?
Speaker 2 (00:22):
Do you think, Well, it's nailed everything else, hasn't It
nailed the same day delivery of books and 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
(00:44):
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
(01:06):
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 1 (01:19):
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 2 (01:26):
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 who
(01:51):
just sells 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
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 Albertson's, which is another
supermarket chain, and so far so good too. So there,
(02:14):
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 1 (02:31):
Now you've already got players doing grocery delivers as well,
or food deliveries. You've got Uber Each, you've got Instacart,
door Dash.
Speaker 2 (02:37):
And so on. So what about then, 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 eats. They obviously dominated
(02:58):
the delivery of takeaways, been no issue there, but they
had both expanded into into grocery delivery to sort of
further bolts to their revenues. But here's the rub that
they're just into metaies charging grosers sort of fifteen to
twenty five percent commissions, while Amazon is the platform, the
logistics network and often the grocery the product grocery supplier
as well. So door Dash and Uber Eats can't compete
(03:21):
with that scale and full integration of Amazon.
Speaker 1 (03:23):
Right, So what do you reckon this means for investors?
Speaker 2 (03:25):
Sam? 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
(03:46):
seen this in Europe is these smaller grosers and regional grosers,
even national grossers. 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
(04:07):
always the other thing is Amazon's actually playing a different game.
It's not really that interested in the grocery margin itself.
The kicker here is that Prime members, of which there's
sort of two hundred billion 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, et cetera. They get free
(04:29):
same day grocery delivery. So this is really the game
for Amazon here is about locking those really 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 1 (04:41):
Interesting stuff.
Speaker 2 (04:41):
Hey, thank you very much. Sam.
Speaker 1 (04:42):
We'll talk to you in a week's time. Sam Dickey
a Fisher Funds.
Speaker 2 (04:45):
For more from Heather Duplessy Allen Drive.
Speaker 1 (04:47):
Listen live to news talks.
Speaker 2 (04:49):
It'd be from four pm weekdays, or follow the podcast
on iHeartRadio.
Amazon has been massively scal 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 a grocery market
worth nine hundred billion dollars. Sam Dicky from Fisher Funds
is with us to talk us through this. Hey Sam,
good eating, He Sam. How does Amazon's move change the
(00:21):
competitive landscape?
Speaker 2 (00:22):
Do you think, Well, it's nailed everything else, hasn't It
nailed the same day delivery of books and 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
(00:44):
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
(01:06):
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 1 (01:19):
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 2 (01:26):
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 who
(01:51):
just sells 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
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 Albertson's, which is another
supermarket chain, and so far so good too. So there,
(02:14):
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 1 (02:31):
Now you've already got players doing grocery delivers as well,
or food deliveries. You've got Uber Each, you've got Instacart,
door Dash.
Speaker 2 (02:37):
And so on. So what about then, 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 eats. They obviously dominated
(02:58):
the delivery of takeaways, been no issue there, but they
had both expanded into into grocery delivery to sort of
further bolts to their revenues. But here's the rub that
they're just into metaies charging grosers sort of fifteen to
twenty five percent commissions, while Amazon is the platform, the
logistics network and often the grocery the product grocery supplier
as well. So door Dash and Uber Eats can't compete
(03:21):
with that scale and full integration of Amazon.
Speaker 1 (03:23):
Right, So what do you reckon this means for investors?
Speaker 2 (03:25):
Sam? 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
(03:46):
seen this in Europe is these smaller grosers and regional grosers,
even national grossers. 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
(04:07):
always the other thing is Amazon's actually playing a different game.
It's not really that interested in the grocery margin itself.
The kicker here is that Prime members, of which there's
sort of two hundred billion 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, et cetera. They get free
(04:29):
same day grocery delivery. So this is really the game
for Amazon here is about locking those really 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 1 (04:41):
Interesting stuff.
Speaker 2 (04:41):
Hey, thank you very much. Sam.
Speaker 1 (04:42):
We'll talk to you in a week's time. Sam Dickey
a Fisher Funds.
Speaker 2 (04:45):
For more from Heather Duplessy Allen Drive.
Speaker 1 (04:47):
Listen live to news talks.
Speaker 2 (04:49):
It'd be from four pm weekdays, or follow the podcast
on iHeartRadio.
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