03:50 PM EDT, 04/23/2024 (MT Newswires) -- Amazon.com ( AMZN ) on Tuesday launched a new grocery delivery subscription service in the US that Wedbush Securities said is likely to help the e-commerce giant capture market share, especially in perishable categories.

Amazon ( AMZN ) said Prime members in more than 3,500 cities and towns can avail the service at $9.99 a month for unlimited grocery delivery on orders of more than $35 from Amazon Fresh, Whole Foods Market, and various local grocery and specialty retailers on Amazon.com ( AMZN ).

People with a registered electronic benefits transfer card can avail the benefit without a Prime membership for $4.99 per month. These customers are recipients of the government food assistance benefits.

Subscription includes one-hour delivery windows at no extra cost where available, priority access to recurring reservations for a weekly grocery order, and an unlimited 30-minute pickup on orders of any size, according to the company. "The subscription pays for itself in as little as one delivery order per month from Whole Foods Market, or one delivery order per month from Amazon Fresh for under $50," Amazon ( AMZN ) said. The company is offering a free 30-day trial to customers.

"Our goal is to build a best-in-class grocery shopping experience," said Tony Hoggett, senior vice president of worldwide grocery stores at Amazon ( AMZN ). "We have many different customers with many different needs, and we want to save them time and money every time they shop for groceries."

Separately, Wedbush Securities said the move is expected to help Amazon ( AMZN ) capture incremental market share, especially in perishable categories where it has "struggled" historically. The company's grocery delivery program is "significantly more affordable" than its existing fee structure, Wedbush analysts, including Scott Devitt, said in a note.

"We think Amazon's ( AMZN ) subscription plan is competitively priced versus existing peers in the market and is potentially more affordable given the absence of per-order service fees, which peers including Instacart (CART) charge on each order," the analysts wrote. Wedbush said Instacart+ charges $9.99 a month and offers a zero delivery fee on orders of at least $35. The company offers lower service fees per order versus non-Instacart+ members, according to the note.

Walmart ( WMT ) offers unlimited grocery delivery as part of its Walmart+ membership program, which costs $12.95 a month, or $98 annually.

Amazon ( AMZN ) shares were up 1.4% ahead of market close on Tuesday, while Instacart and Walmart ( WMT ) fell 7.2% and 1.9%, respectively.

"The grocery category is highly competitive, and over the long-term we continue to believe competitive dynamics in the industry will limit Instacart's growth potential as the company faces pressure from retailers like Amazon ( AMZN ) and Walmart ( WMT ) as well as other intermediary platforms," Wedbush said.

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