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Amazon enters $15b food delivery market

Source: Amazon

Amazon is taking delivery competition up to Australia’s two supermarket giants, teaming up with a NSW grocery chain.

The retail behemoth has joined forces with Harris Farm to offer same-or next-day deliveries to more than 80 Sydney suburbs in a move that has the potential to shake-up Australia’s booming fresh food delivery market.

The partnership means local consumers will be able to buy fresh food from Amazon for the first time – adding to about 55,000 non-perishable grocery items the platform already offered.

Amazon Australia APAC director of Prime Arno Lenior said fresh food was the “missing link” for Aussie customers.

“We’ve seen our everyday essentials category, what we call everyday essentials, as one of our fastest-growing categories. In fact, we’ve seen it grow by more than 30 per cent year on year,” Lenior said.

“Our customers are actually already buying a lot of pantry staples, household items and personal care products from us, but fresh food was the missing piece. So now they can do a complete grocery shop on Amazon.”

So far the service, which began on Wednesday, is restricted to postcodes in Sydney’s inner-city and inner-west, and surrounding areas from Double Bay to Lakemba and Rhodes to Rockdale.

Orders will initially be fulfilled from Harris Farm’s Leichhardt store, with Amazon Flex delivery partners providing “last-mile delivery”. Additional Harris Farm stores will be added throughout 2026, expanding the suburbs where the service is offered – although Amazon was silent on any further expansions beyond Sydney.

“Australians told us they wanted fresh groceries delivered fast, and we listened. Now they can get Harris Farm’s quality fruit and veg at their door the same day they order,” Lenior said.

“We’re thrilled to add Harris Farm’s exceptional range of fresh produce and artisan products to our selection, enabling eligible customers to do their complete grocery shop on Amazon.”

Harris Farms is a family-owned grocery chain with more than 30 outlets in NSW, the ACT and Queensland. It provides an upmarket alternative to Coles and Woolworths by offering a farmers’ market experience and products sourced from local farmers and suppliers.

“We’re excited to team up with Amazon. They share our passion for putting customers first, and their logistics expertise helps us get more of the good stuff to more homes, more reliably,” Harris Farm Markets co-chief executive Angus Harris said.

“It also helps us stay responsive in a highly competitive grocery segment, without compromising on what we’re known for – top quality products at great value.”

Amazon Prime members (who pay $9.99 a month, or $79 a year) will get free delivery on Harris Farm orders of more than $100. Non-Prime customers will have to order more than $200 worth to get free shipping, or pay a $15 delivery fee.

Deliveries can be scheduled for a two-hour window.

The Amazon-Harris Farm deal comes after discount supermarket chain Aldi also entered the delivery market. It teamed up last year with DoorDash to offer home delivery of groceries, expanding that earlier in January to items from its cult favourite “Special Buys”.

Coles and Woolworths have long dominated fresh food deliveries in Australia, in a market that is already worth more than $15 billion and predicted to surge to more than three times that by 2034. Both offer delivery for orders placed on their websites and via third-party platforms.

Late last year, consumer group Choice found Australian households were paying up to 40 per cent more for the convenience and speed of getting groceries delivered through a third-party app.

Noting that apps such as DoorDash, Uber Eats and Milkrun enabled shoppers to receive their order quickly – “in some cases in less than an hour” – Choice compared the cost of a basket of 13 products bought in-store compared with their cost through the third-party platforms.

It found individual items were on average 11 per cent more expensive when bought via a third-party delivery service, with some products as much as 42 per cent more ­– before the addition of delivery fees and any other service costs.

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