Amazon to test Prime Now delivery service in Canada

Amazon will pilot its one- and two-hour membership delivery service Prime Now in Canada later this year, according to The Wall Street Journal.

A source "familiar with the matter" told the newspaper the pilot program would run in Toronto and Vancouver to start and, based on its success, expand to other Canadian cities throughout 2018. Through the service, the company will offer grocery items such as produce, dairy and frozen food.

Prime Now is available to Amazon Prime members in Canada. Membership to the service costs $79 a year.

The move marks a broader push into the Canadian market for Amazon and leverages its recent acquisition of Whole Foods, which has 13 stores in Canada—six in British Columbia and seven in Ontario.

Prior to the Amazon-Whole Foods deal, the organic grocer had plans to expand its presence in Canada, but last winter cancelled store openings in Calgary and Edmonton.

Amazon took ownership of Whole Foods Aug. 28 and immediately slashed prices on organics and specialty items to lure in customers and create buzz. But retail experts don't expect the pricing strategy to negatively impact the Canadian grocery industry.

“Whole Foods is already marked up quite high,” said Mark Lee, associate professor at the Ted Rogers School of Retail Management. “The price reduction is really just getting back to the level of regular grocery prices.”