Amazon adds perishable foods to same-day delivery to take on Instacart, Walmart

NEW YORK (Reuters) - Subscribers to Amazon.com's (AMZN.O), opens new tab Prime service can now get strawberries, milk, meats and frozen dinners on the same day they order them as the company expands its fast-delivery option to perishable food items, Amazon said on Wednesday.

It is the latest move by Amazon to compete with delivery services offered by Walmart+ (WMT.N), opens new tab and Instacart.

The new same-day delivery service is free for Prime members, who pay $14.99 monthly or $139 annually, for orders over $25.

Shoppers without a Prime membership have to pay a $12.99 fee, regardless of order size, to use the new service. Walmart's membership service, Walmart+, costs $98 a year and offers same-day delivery in under three hours - with some orders arriving in as little as 30 minutes.

Amazon announced in June it is investing $4 billion to bring same-day and next-day delivery services to more than 4,000 rural U.S. communities by the end of the year.

In May, Walmart said it will soon be able to offer delivery within three hours to 95% of the U.S. population, and that faster delivery speeds are helping drive its business.

Amazon's acceleration into perishable food delivery could strain small, independent grocers across the U.S., said Chedly Louis, vice president of corporate finance at credit rating agency Moody’s Ratings.

Amazon shoppers "can order milk alongside electronics ... and check out with one cart and have everything delivered to their doorstep within hours," Doug Herrington, CEO of Worldwide Amazon Stores, said in a press release.

While the company is focusing on its U.S. grocery experience, it is facing hurdles in the UK with its suppliers, a study by British grocery regulator the Groceries Code Adjudicator found.