Amazon's Whole Foods delivery service is off to a roaring start — and it's a huge threat to Instacart

Hayley Peterson
  • Amazon is now offering two-hour deliveries from select Whole Foods stores through its Prime Now service.

  • Amazon couriers are already outnumbering couriers from Instacart at one Whole Foods store in Austin, an employee told Business Insider.

  • The service will be rolled out nationwide, which could threaten Instacart's business in Whole Foods.

Amazon started offering customers two-hour deliveries from select Whole Foods stores last week.

The service is still limited to only a handful of stores, but it appears to be off to a roaring start.

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At one Whole Foods store in Austin, Amazon couriers are already outnumbering couriers from Instacart, an employee at the Austin store told Business Insider.

Instacart signed a five-year deal in 2016 to become Whole Foods' exclusive delivery service. The company is now competing with Amazon couriers since Amazon purchased Whole Foods last year in a $13.7 billion deal.

This is bad news for Instacart, which has higher fees than Amazon's delivery service.

Instacart costs $11.99 for one-hour delivery or $9.99 for delivery within two hours or more, though prices can increase at particularly busy times.

Shoppers can also pay $149 annually for a membership that gives them unlimited free two-hour delivery on orders costing more than $35.

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Amazon Prime Now, on the other hand, costs $4.99 for two-hour delivery and $7.99 for one-hour delivery. Orders costing more than $35 are delivered for free within two hours. Shoppers must be members of Amazon's Prime service, which costs $99 annually, to access Prime Now.

Amazon Prime Now not only has the benefits of being cheaper than Instacart: it's also getting more in-store marketing in its test markets.

Part of the Whole Foods store on Domain Drive in Austin has been turned into a storage area for Prime Now orders. The area has checkout registers for Prime Now couriers, as well as coolers and shelving for prepared orders.

The area also functions as an advertisement for the delivery service, with ample signage marketing the new service.

The Amazon delivery test is currently limited to customers in Austin, Cincinnati, Dallas, and Virginia Beach, and it will be expanded across the US this year.

Here's what some customers are saying about the new service on social media:

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SEE ALSO: 'We can only take so much abuse': Whole Foods suppliers slam 'hellacious' new policies and say rising costs are hurting business

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