The Space Shelf Weekly. Amazon’s Same-Day Grocery Push: Can It Break Walmart’s Lead?

Amazon’s grocery play is back in the spotlight. The company announced it will roll out same-day delivery for perishables to 2,300 U.S. markets by year’s end, free for Prime members with orders of $25 or more. Investors cheered, sending Amazon stock higher while Walmart, Instacart, and DoorDash slipped. The move signals a renewed push into a trillion-dollar U.S. grocery market where Amazon still lags behind.

Despite its dominance in overall e-commerce, Amazon has yet to find a winning formula in groceries. Whole Foods, acquired in 2017, never became the springboard many expected. Amazon Fresh has struggled for traction. Today, Amazon sits firmly in second place online, trailing Walmart’s commanding lead. According to eMarketer, Walmart will capture 32% of U.S. online grocery sales this year, compared to Amazon’s 22.6%.

The contrast is structural. Walmart leverages more than 4,600 stores to cover 93% of U.S. households within three hours. That store network became a fortress during the pandemic and inflation years, when “flight-to-value” sent shoppers across income levels flocking to Walmart for delivery. Its Walmart+ membership further reinforces loyalty. Affluent households, once loyal to regional chains, have shifted to Walmart for convenience and cost.

Amazon’s Achilles’ heel remains its lack of physical presence. Whole Foods and Fresh represent only a sliver of Walmart’s reach. Instead, Amazon is betting on fulfillment centers—the backbone of its retail empire. Following its 2022 warehouse expansion, Amazon now aims to ship perishables alongside batteries, detergent, and toothpaste directly from its regionalized network. A pilot program allowing customers to bundle perishables with other items showed promise, with 20% of users placing repeat orders within their first month.

If Amazon succeeds, the benefit is bigger than market share. Groceries are an “everyday essentials” category. They drive frequency. They keep customers opening the app, engaging with Prime, and building habits that extend beyond food. This is why Wall Street largely welcomed the move. BofA’s Justin Post called it a chance for Amazon to “see important customer frequency benefits.”

Not everyone is convinced. Analysts argue that delivering fresh food is a different game. Proximity matters, and Walmart’s store footprint will be hard to match. CFRA’s Arun Sundaram put it bluntly: “To deliver highly perishable goods to consumers, you need to be close.”

The near-term fallout, however, seems more immediate for Instacart and other intermediaries. Instacart’s parent, Maplebear, dropped 14% after the news, while DoorDash fell 4%. Some analysts called the selloff excessive, pointing to Instacart’s steady growth and partnerships with Costco and Kroger. Instacart still dominates the third-party segment with a 58% market share. Yet as Wedbush’s Scott Devitt noted, Prime’s growing appeal as a grocery subscription could diminish Instacart’s pull with consumers.

That’s the tension: Walmart owns proximity, Instacart owns local selection, and Amazon owns scale. Jassy is betting that scale, combined with habit-forming categories, can bend the curve. Whether it erases Walmart’s lead is another question. For now, the move looks less like a knockout punch and more like Amazon putting itself back in the ring.