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Shoppers turn to Amazon for fresh produce and seafood, helping it take market share from supermarkets

Amazon delivery worker loads paper bags into a cargo e-bike on a residential city street.
Amazon's expanded fresh food delivery is helping it win market share from more traditional retailers.

: Deb Cohn-Orbach/UCG/Universal Images Group via Getty Images

  • Amazon's sales of fresh groceries like seafood and produce are growing fast, new data show.
  • The retail giant is also gaining market share against more traditional retailers, Nielsen IQ found.
  • The data shows momentum for Amazon in a business it's spent years trying to break into.

Amazon is gaining ground in grocery thanks to items like fresh shrimp and berries.

Roughly a year after expanding same-day fresh grocery delivery to thousands of cities and towns in the US, Amazon's perishable grocery sales are booming — and taking market share from traditional retailers, according to data from market research firm Nielsen IQ.

Sales of groceries such as seafood, dairy, and produce on Amazon increased severalfold between June and August, per Nielsen IQ's data. Amazon also posted market share gains in the food category for the year through late August as traditional grocery stores lost it, Nielsen found.

Two bar charts compare total and online food dollar share changes by retail channel versus year ago.
Amazon gained market share in food sales, both overall and online, as rivals such as grocery stores lost it.

Nielsen IQ

"Shoppers are increasingly embracing Amazon for categories that historically represented one of the largest barriers to online grocery adoption," Nielsen wrote in its report.

Amazon has spent years trying to break into grocery, though it hasn't hit a home run in the category as it did with books or cloud computing. The company acquired Whole Foods, opened and shuttered another brick-and-mortar grocery chain, and created a selection of private-label groceries, among other steps.

The Nielsen IQ data suggest that Amazon's latest push — toward delivering fresh groceries quickly across much of the US — is yielding some results in the competitive grocery space.

Many of the shoppers buying fresh foods on Amazon come from households with incomes over $100,000 and tend to be older, according to Nielsen IQ. They also tend to be frequent Amazon users, placing more orders and spending more money on the platform than an average user.

That means fresh groceries, one of the most frequent purchases for US households, are "a potentially important lever for increasing shopper frequency and overall spend" on Amazon, the report reads.

To keep the momentum going, Amazon will need to take on formidable rivals. One is Walmart, which already uses its stores and its own army of gig workers to deliver groceries same-day.

Amazon is considering opening about 1,000 same-day fulfillment centers around the US by 2031, Business Insider reported in September. That move would create the same sort of advantage that Walmart has by placing more fulfillment centers close to more customers, one analyst said.

Do you have a story idea about Amazon's retail operations? Contact this reporter at abitter@businessinsider.com or via encrypted messaging app Signal at 808-854-4501. Use a personal email address, a nonwork WiFi network, and a nonwork device; here's our guide to sharing information securely.

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This new food delivery service is trying to take on DoorDash and Uber Eats by offering no menu markups

Person walking on a sunlit sidewalk carrying a brown paper takeout bag beside a wall casting a long shadow.
Restaurant software company Olo is launching a delivery app.

Bloomberg/Getty Images

  • Restaurant software provider Olo is launching a delivery app.
  • Olo will offer the same menu prices for delivery that in-person visitors get, it said.
  • Other delivery services often mark up order prices.

A new food delivery service is taking aim at menu mark-ups — and some entrenched rivals

Restaurant ordering software company Olo is launching its own customer-focused app, it said on Tuesday. The app puts it in competition with more established delivery companies, such as DoorDash and Uber Eats.

On Olo's app, customers will see the same prices that restaurants charge in-person patrons, the company said. By contrast, third-party delivery services often charge customers higher menu prices than diners would get at a restaurant.

Offering in-store prices can save customers between 15% and 30%, Olo said.

"It's a better experience for consumers and a more sustainable model for restaurants, with no menu price inflation and no barriers standing between great brands and the people and communities they serve," Olo CEO and founder Noah Glass said.

Food delivery is one area where consumers continue to spend money, even as they cut back their budgets elsewhere. How much customers pay for delivery — and whether apps charge individuals different prices or the same order — can affect how often they order.

Olo is stepping into a competitive space. DoorDash and Uber Eats continue to grow, including by rearching into club deliveries and catering. And Walmart, which spent years building its own grocery-focused delivery service, started delivering restaurant orders earlier this year.

Olo got its start in 2005 with a service that let users text their orders to restaurants in the pre-smartphone era. Now, the company fields about 3.5 million orders daily through around 800 restaurant brands.

The company doesn't have its own team of delivery drivers. Instead, the company uses its own dispatch service to compare delivery options at other third-party services, such as Grubhub, and pick one based on factors like cost and speed.

Olo's delivery app will allow customers to order from about 250 restaurants, including Five Guys and Dave's Hot Chicken.

Do you have a story idea about Uber Eats, DoorDash, or another delivery service? Contact this reporter at abitter@businessinsider.com or via encrypted messaging app Signal at 808-854-4501. Use a personal email address, a nonwork WiFi network, and a nonwork device; here's our guide to sharing information securely.

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Uber offers hundreds in bonuses for some drivers as the busy holiday season approaches

Driver sits behind the windshield of a blue vehicle displaying an Uber logo and windshield sign.
Uber is offering some drivers hundreds of dollars in incentive pay, depending on how many rides they complete in a given period.

Michael Macor/The San Francisco Chronicle via Getty Images

  • Uber is offering bonuses to some drivers for completing more rides or referring new drivers.
  • The bonuses can add up to hundreds or thousands of dollars.
  • Uber has used such extra pay in the past to attract drivers to the platform.

Uber is offering ride-hailing drivers something that many haven't seen in years: Big bonuses.

The ride-hailing service is coaxing some drivers to take more rides, offering up to several hundred dollars in "incentive" pay if they complete a set number of rides within a set time period, according to several screenshots of the offers seen by Business Insider.

In one example, a driver was offered $525 if the driver completed 45 trips within a few days. Similar offers involved smaller payouts and fewer trips, but paid out proportional amounts of $10 to $12 per trip.

That's a huge pay bump for many drivers, who make as little as a few dollars per trip, said Sergio Avedian, an Uber driver and senior contributor to the gig-driver-advocacy blog and YouTube channel The Rideshare Guy.

The bonuses might also be Uber's attempt to get more drivers on the road to meet rider demand during busy periods like Halloween and the holiday travel season, Avedian said.

"This may tell the story that they need supply," he said. "They're saying that we need to get everybody out there."

Some drivers have also gotten messages from Uber encouraging them to refer friends to sign up as drivers or get those who haven't driven in a couple of years back on the app, according to screenshots seen by Business Insider. Payment for those referrals can reach up to $1,225.

The payments are a potential boon to Uber drivers, whose pay can vary significantly between cities.

Uber drivers have to cover their own costs, such as car maintenance, since they are independent contractors, not full-time employees. Rising gas prices have eaten into drivers' pay after the US and Israel started a war with Iran earlier this year.

An Uber spokesperson did not provide details on why the company is offering the payments.

Uber has used targeted incentive payments before.

In 2021, demand for rides began to outpace the number of available drivers after many had stopped driving during the pandemic.

In response, the company decided "to invest fast and to invest aggressively in attracting drivers back to Uber" and increased the number of active drivers on the app by 65% between January and November that year, CEO Dara Khosrowshahi said on an earnings call at the time. Uber later pulled back on the extra pay.

"When we were coming out of the pandemic, they were short tons of drivers," said Avedian, who was driving for Uber at the time. "It was crazy bonuses out there."

More recently, riders have been paying more per mile and waiting longer for their rides to show up, according to a study published last month.

Do you have a story idea about Uber? Contact this reporter at abitter@businessinsider.com or via encrypted messaging app Signal at 808-854-4501. Use a personal email address, a nonwork WiFi network, and a nonwork device; here's our guide to sharing information securely.

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I'm a firefighter who turned to Uber as a temporary gig. It's been a tough way to make money

Person in a black shirt sits at an outdoor cafe table holding a paper cup near an illy mug.
Matthew Guerrero drives for Uber in Southern California.

Matthew Guerrero

  • Matthew Guerrero says gas costs eat up much of his pay as an Uber driver in Southern California.
  • He prioritizes giving rides to weekend barhoppers who tend to tip well, he said.
  • Uber says that one driver's experience isn't representative of the broader platform.

This as-told-to essay is based on a conversation with Matthew Guerrero, a 41-year-old Uber driver in Southern California. It has been edited for length and clarity.

I worked as a firefighter for about four years before I got injured on the job.

I've been seeking a workers' comp settlement that should be settled soon. In the meantime, my lawyer said that I could start working again. I needed a job really quickly, especially with three kids, so I started driving with Uber.

I've been driving with Uber for about five weeks. So far, it hasn't been very successful. For example, one week, I made $600 working 30 hours. To make that, I spent about $300 in gas driving my SUV.

Then, I have to put between 20% and 30% of what's left aside for taxes. That comes out to about $210 for 30 hours of work. That doesn't even include wear and tear on my car. I don't understand how anybody can do this long-term. It's not sustainable.

The pay is better if you drive in Los Angeles or San Diego. But I'm in Riverside County, and the pay seems to be lower here.

To get better-paying rides, you have to be strategic. Sometimes, I try to get a ride with a passenger who's headed to an airport in one of the big cities. Then, I stay there all day and take rides. That's not always feasible, though.

When I started with Uber, I realized that there were a lot of rides that involved taking people to morning doctor's appointments. Most of those people didn't tip well, though, and tips are key to making money.

Instead, I like to work Friday and Saturday nights around bars in Temecula. I usually log on around 4 pm and head home around 3 am. The pay is good, and the tips are a lot better than other rides in my area. Sometimes you have to deal with drunk people throwing up, but it's worth it.

I've given some rides to veteran Uber drivers — people who were working on the app back in 2015 and 2016. They said that they used to make better money than I do, and that they quit after they saw pay fall.

That was eye-opening for me. I don't understand how a company like Uber can pay as little as they do.

An Uber spokesperson said drivers in Riverside County, California make "at least $20.28 per engaged hour, plus $0.37 per engaged mile for vehicle expenses, with tips on top of that."

"While this guarantee doesn't cover time spent waiting for trips, it's important context when discussing driver compensation," the spokesperson said. Driver earnings can vary based on when drivers decide to work, where they drive, and rider demand.

"One driver's experience isn't representative of the broader platform," the spokesperson said.

Do you have a story idea about Uber? Contact this reporter at abitter@businessinsider.com or via encrypted messaging app Signal at 808-854-4501. Use a personal email address, a nonwork WiFi network, and a nonwork device; here's our guide to sharing information securely.

Read the original article on Business Insider
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