Amazon Tests 'Ultrafast' Deliveries In These Two Cities. Rival Grocery Delivery Stock Takes A Hit.

Core Viewpoint - Amazon is launching an "ultra-fast" delivery service called Amazon Now in Seattle and Philadelphia, aiming to deliver household essentials within 30 minutes, which could significantly impact the grocery delivery market [1][2][4]. Group 1: Amazon's New Service - Amazon will offer thousands of everyday household essentials and fresh grocery items through the Amazon Now service, available in eligible areas of Seattle and Philadelphia [2]. - The service will utilize smaller warehouses located near dense urban areas to facilitate quicker deliveries [2]. Group 2: Pricing and Competition - The delivery service comes at a higher cost compared to Amazon's standard shipping options, with charges of $3.99 for Prime members and $13.99 for non-Prime users, plus an option to tip delivery drivers [3]. - The competitive landscape has intensified, particularly for Instacart, as Amazon's expansion into same-day grocery delivery poses a direct challenge to its market position [4][5]. Group 3: Market Reactions - Following the announcement, Amazon's stock rose by 1% to $236.18, while Instacart's stock fell over 2% to $41.64, reflecting investor concerns about competition [5]. - Instacart's stock has been volatile, gaining only 3% year-to-date, with fears of Amazon's competitive threat weighing heavily on its performance [6].