Amazon may be consolidating its grocery businesses.
Amazon will be merging its Amazon Fresh delivery service with its Prime Now delivery service by the end of the year, according to a new report from Yahoo Finance.
Prime Now, started in 2014, is Amazon’s two-hour delivery service which uses centrally located hubs to deliver general merchandise and grocery items like fresh produce and packaged consumer goods. It has expanded rapidly and is now in major cities across the country. The big perk: delivery is free for orders over $35.
Amazon just added Whole Foods as another place to order from with Prime Now in four cities with plans to roll out nationwide, and the early responses from customers have been positive.
Amazon Fresh is the company’s first try at delivering groceries. It has a much larger variety of grocery items than Prime Now — nearly double by Business Insider’s estimate — and uses large trucks to deliver instead of couriers. Customers must book a time for delivery. Fresh costs $15 a month on top of Prime membership, and it is more costly.
Amazon Fresh was discontinued in portions of six states last November, prompting speculation that the future of the brand was in jeopardy.
Some kind of synergy between the two has been expected by analysts for some tim e. Both services are already headed by the same VP at Amazon — Stephenie Landry — after she took over Amazon Fresh late 2017.
That doesn’t mean that Amazon Fresh and Prime Now brands will be going away, but the teams behind the services may merge. Landry threw cold water on the idea of a complete merger in an interview with Recode in 2017
“I actually think that we’re going to have lots of different ways to get food to customers. But behind the scenes it makes sense to develop as many efficiencies as possible,” she said.
Instead, the same teams will work on the logistics, while customers will get an increased variety of both delivery options and inventory. One possibility is Fresh will be repositioned as a business delivery service, while Prime Now will be oriented toward the consumer.
The job cuts Amazon is making, which were first reported by the Seattle Times, may also be linked with the merging of the two services, Yahoo suggests.
Amazon did not immediately respond to a request for comment.