Whole Foods is introducing pickup points for online grocery orders, the latest change Amazon.com Inc. AMZN 0.80% is introducing to compete against rival food retailers.
Grocery pickup is the first major new service introduced at Whole Foods stores since Amazon in May began slashing prices that Prime members pay there.
Stores with the service will have reserved parking spots for customers who have placed orders online. Whole Foods clerks will bring goods those customers have ordered directly to their cars.
Online grocery pickup, or “click and collect,” has become particularly popular with suburban shoppers who drive to get their groceries. Walmart Inc. and Kroger Co. have invested heavily in opening hundreds of pickup locations.
Whole Foods on Wednesday said it added the service in Sacramento, Calif. and Virginia Beach, Va. and plans to add more cities soon. Grocery pickup will be available only to Amazon Prime members, another way the e-commerce giant is using Whole Foods to make its subscription service more attractive after raising the annual fee by 20% to $119.
About 15% of digital food and beverage sales go to online grocery pickup, according to ratings firm Nielsen. Bulky items like beer, wine, frozen meat and cheese are the most frequently purchased, Nielsen found. “Click and collect” customers tend to be less affluent than those who use online-only grocery services, Nielsen said.
Amazon said its service will be faster than those of its competitors. Customers can pay $4.99 to get their orders fulfilled in 30 minutes, or receive them free in an hour. “We’ll have their groceries loaded into their car just minutes after arrival,” said Stephenie Landry, the Amazon’s vice president overseeing Prime Now and the company’s grocery division.
Having customers pick up groceries they ordered online tends to be more profitable than delivering them because companies are spared the cost of transport to a customer’s home. It also keeps customers coming to stores, something traditional grocers are seeking to encourage to avoid losing more sales to online retailers.
Amazon has struggled for years to master grocery delivery, in part due to the logistical complexity. Before Amazon’s roughly $13.5 billion acquisition of Whole Foods last year, the online retail giant had dabbled in grocery pickup as a potential solution.
Whole Foods’s sales, meanwhile, have grown since Amazon bought it.
—Laura Stevens contributed to this article.
Write to Heather Haddon at heather.haddon@wsj.com