Amazon just dropped a bomb in the Charlotte grocery wars

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Harris Teeter has spent millions over the past few years shoring up its position as Charlotte’s grocery juggernaut.

Walmart, Food Lion and recent entrant Publix have spent millions more trying to take the crown for themselves.

All four have built new stores, renovated old ones, added more craft beer and built out delivery options.

Harris Teeter and Publix have built competing mega-stores on the same patch of South Boulevard, the city’s young professional corridor. They’re dueling over in Cotswold, too, with stores right across the street from each other.

Food Lion plowed $215 million in a major overhaul of its area locations, including its Dilworth store.

Yes, there’s a war going on for Charlotte’s grocery dollars.

Harris-Teeter

A bomb in that war was just dropped by a company that previously wasn’t a major player: Amazon.

The online giant announced earlier this week that it would bring free two-hour delivery for Prime members on select items.

On Thursday, the first promotional emails went out to local Prime members.

The full list of things Charlotteans can order with two-hour delivery is here. For the most part, it’s everything you typically go to the grocery store for today.

Will Charlotteans start buying their groceries there? Well, Amazon has one big advantage.

And that’s the ridiculous number of people who have a Prime membership. It costs $99 per year (cheaper for students and people who receive SNAP benefits).

Estimates by Piper Jaffray already put Amazon Prime penetration at an unbelievable 60 percent of U.S. households, and the service reaches as much as three out of every four of the highest-earning families.

Most every grocery delivery service out there in Charlotte today charges an annual membership fee, plus some sort of delivery charge. If Charlotte finds value in an Amazon Prime membership already, the rapid delivery and grocery selection feel like a nice bonus.

HT-Express-Lane

There are still some hurdles to overcome.

Price is the big one. Grocery prices on Amazon are significantly higher than at most grocery stores, especially for people who shop the sales. Charlotte grocery shoppers are still largely price-conscious.

Selection is another. You can’t get Fig Newtons on free two-hour delivery right now, which is a huge minus.

Ballantyne-Grocery-Store

But there’s no telling what Amazon could do from here.

One question: Will Amazon unvveil a private label grocery brand to compete with the store brands Harris Teeter has and Great Value at Walmart?

And we haven’t even mentioned yet that Amazon just spent $13.7 billion to buy Whole Foods, which has locations in SouthPark, Waverly and Huntersville. Whole Foods captured just 1 percent of the region’s grocery market share, good for No. 16 locally. That will only go up.

This time next year, expect a radically different Charlotte grocery battlefield.

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Andrew Dunn
| @andrew_dunn |
Editor-in-Chief