Amazon just fired its latest shot in the grocery price wars. The e-commerce giant launched Amazon Grocery, a new private-label brand with over 1,000 items priced under $5, directly challenging Walmart's dominance in budget shopping. The move consolidates Amazon's scattered Happy Belly and Amazon Fresh brands under one unified label as the company scrambles to make its struggling grocery division profitable.
Amazon is doubling down on budget groceries with a brand consolidation that signals the company's most aggressive pricing strategy yet. The newly launched Amazon Grocery unites the company's fragmented Happy Belly and Amazon Fresh private labels under one umbrella, with most of its 1,000+ items priced under $5 - a direct challenge to Walmart's Great Value dominance.
"During a time when consumers are particularly price-conscious, Amazon Grocery delivers more than 1,000 quality grocery items across all categories," Jason Buechel, Amazon's VP of worldwide grocery, said in Wednesday's announcement. The timing isn't coincidental - food inflation continues pressuring household budgets while discount retailers like Dollar General and Aldi gain market share.
This isn't Amazon's first budget grocery experiment. The company launched Amazon Saver last September with similar value positioning, but that brand failed to gain traction against established competitors. Industry analysts suggest the rebrand signals Amazon's recognition that scattered grocery labels confused consumers and diluted pricing messages.
The launch comes as Amazon's grocery division undergoes major restructuring. Just last week, the company announced closure of all Fresh supermarket locations in the UK, while simultaneously streamlining its Go cashierless convenience stores. The physical retail pullback contrasts sharply with Amazon's aggressive online grocery expansion.
CEO Andy Jassy has repeatedly highlighted the success of "everyday essentials" - canned goods, paper towels, dish soap - within Amazon's online grocery business. These high-frequency, low-margin items drive customer loyalty and increase order frequency, crucial metrics for Amazon's subscription-based Prime model.
The strategic shift reflects broader market dynamics. continues dominating grocery with nearly 24% market share, while traditional grocers like and lose ground to discount formats. Amazon's grocery revenue remains a fraction of its $574 billion total, but the category's massive addressable market makes it impossible to ignore.