[Updated below with Amazon comment.] After more than five years of testing in the Seattle region, Amazon introduced Amazon Fresh in Los Angeles this morning — the long-awaited first step in a broader national rollout of its grocery delivery service.
The launch in L.A. comes with a big twist that reveals more about how the company will try to make the economics of grocery delivery work: After a 90-day trial, customers in L.A. will need to pay for a $299/year “Prime Fresh” membership to use the service. However, the company says all Prime Fresh orders will come with no delivery charges on orders of at least $35.
That’s different from the company’s approach in Seattle, where Amazon Fresh is open to anyone and includes delivery charges of $8 to $10 unless the customer achieves “Big Radish” status based on volume of orders over time.
Amazon’s new $299/year Prime Fresh program in L.A. also comes with the benefits of the regular Amazon Prime membership, including free two-day shipping, video streaming and Kindle book rentals. The program is launching via a 90-day no-extra-charge trial for existing Amazon Prime members.
In the Seattle region, GeekWire has found that Amazon Fresh prices are consistently higher than those at traditional grocery stores. Our price comparison of selected items at Amazon Fresh and a Seattle Fred Meyer showed prices about 14 percent higher on average at Amazon Fresh, before delivery fees.
We’ve asked Amazon if the Prime Fresh program will be expanded to existing customers in the Seattle region, as well, and we’ll update this post depending on what we hear back.
Amazon has also reportedly been eying a launch of Fresh in the San Francisco area.
Update: An Amazon spokesperson tells GeekWire: “While we can’t comment on our future roadmap, we are excited to try a new approach in Los Angeles. We know customers value this service, but the economics remain challenging. We will continue experimenting and innovating on behalf of our customers to find a model that works.”