Amazon will charge delivery fees on fresh grocery orders under $150

Amazon will begin charging delivery fees for fresh grocery orders that are less than $1[ads1]50, in a move it said will help keep prices low on its services.

Starting February 28, Prime members who want home delivery from Amazon Fresh will incur a $9.95 delivery fee for orders under $50, while orders between $50 and $100 will include a $6.95 delivery fee, and orders between $100 and $150 will have a $3.95 delivery fee, the company said in a note to customers seen by CNBC. Only Prime members can use the delivery service, although anyone can shop at an Amazon Fresh grocery store.

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Amazon previously guaranteed members of its $139-a-year Prime service free shipping on recent orders over $35.

“This service charge will help keep prices low in our online and brick-and-mortar grocery stores as we better cover grocery delivery costs and continue to enable providing a consistent, fast and high-quality delivery experience,” the notice said.

The move comes as Amazon CEO Andy Jassy has begun a sweeping review of the company’s spending amid slowing sales and a worsening financial outlook. Amazon has looked at laying off 18,000 employees, freezing hiring in the company’s workforce and halting or canceling some projects such as a sidewalk robot and a telehealth service.

Amazon has previously recalibrated its approach to online grocery delivery, a business that is notoriously challenging from a cost and efficiency perspective. In 2021, Amazon added a $10 service fee for delivery orders from Whole Foods to Prime members, after previously offering them at no extra charge.

SEE: How Whole Foods has changed in the five years since Amazon took over