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Amazon Takes Steps to Keep Up with Grocery Delivery Demand

By Daniel B. Kline - Mar 30, 2020 at 9:19AM

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The online retailer has made some changes.

Amazon (AMZN 1.12%) has struggled to keep up with increased demand on its grocery delivery services due to coronavirus keeping many people confined to their homes. The retailer offers same-day delivery through its Amazon Fresh program and to Prime members from its Whole Foods Market locations.

Whole Foods stores remain open, albeit with modified hours, for customers who cannot secure a delivery slot.

An Amazon tractor trailer.

Amazon has adjusted its supply chain to make sure more essentials are in stock. Image source: Amazon.

What is Amazon doing?

In a broad sense, Amazon is adding 100,000 employees across the company to meet the increased demand. It has also been paying workers more and offering higher pay for employees to move into in-demand roles. The retailer has also taken steps to have the most-needed items in stock.

"We are working around the clock with suppliers to get the items we know customers need back in stock as quickly as possible and are temporarily prioritizing pantry, household staples, and other high-demand products," the company said in a post on its web site.

Amazon has also been limiting the quantities customers can order of certain high-demand items. Finally, the retailer is also offering unattended delivery where it will drop orders not containing alcohol at a location specified by the customer.

Keeping America supplied

Amazon has been adjusting on the fly to deal with an unprecedented situation. The company has not completely succeeded but it has managed to keep most items in stock and deliver a steady stream of needed items to its customers. As the pandemic continues the company has gotten stronger by making adjustments and adding capacity.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

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