Dive Brief:

• Sprouts Farmers Market has partnered with Amazon Prime Now to offer free two-hour delivery of groceries to shoppers in Denver, according to the Denver Post. This was part of a wider rollout of the Prime Now service in the Mile High City, which includes one-hour delivery of goods for $7.99.
• The Prime Now addition comes less than a month after Amazon brought its AmazonFresh grocery delivery service to the Denver market. The e-tailer is also set to open two large fulfillment centers in the city.
• Denver is the 30th U.S. city to feature Amazon Prime Now services.

Dive Insight:

While Instacart and Shipt have been signing grocery accounts at a furious pace, Amazon Prime Now has slowly grown its retailer partnerships in cities across the country. Sprouts, which operates more than 250 stores in 13 states, is the largest grocer to join with Amazon, and now offers delivery through Prime Now in several cities, including Los Angeles, San Diego, Austin and Dallas.

At an investors’ conference last year, Sprouts CFO Brad Lukow said the natural and organic retailer was very pleased with the Amazon partnership. The benefits seem clear: Sprouts is working with the world’s most powerful e-commerce provider and has access to its many Prime members, potentially expanding its market reach. The ability to offer free two-hour delivery to many Prime users gives the grocer an advantage in metro markets where shoppers are increasingly turning to e-commerce.

But there seem to be potential conflicts within the partnership. Amazon’s own grocery service, AmazonFresh, beat Sprouts to the Denver market when it rolled out less than a month ago. The e-tailer also offers groceries through its Prime Now service. The company’s grocery offerings dominate its Prime Now landing page, where Sprouts appears as a separate tab under “Shop Local Stores.”

Shoppers loyal to Sprouts will find their way to the grocer’s e-commerce offerings. And the retailer does offer attractively low prices on fresh foods and produce. But the customer experience very much belongs to Amazon, which could impact sales and brand awareness for the fast-growing grocery chain.

Ultimately, Sprouts remains focused on store growth, including expansion into a crowded East Coast market. Amazon, meanwhile, continues to slowly circle the grocery space. Its AmazonFresh Pickup service went live last month, while its checkout-free Go store appears to be back on track.