Amazon Scales Back Fresh Grocery Delivery After Whole Foods Deal
Amazon is scaling back its grocery-delivery service, Amazon Fresh, in parts of at least seven states, tweaking its strategy after buying Whole Foods Market in June.
The states affected are New York, New Jersey, Pennsylvania, Maryland, Virginia, Connecticut and California.
Amazon launched the Fresh delivery service a decade ago in Seattle, which was its first foray into the $800 billion grocery market and an attempt to get shoppers to buy fresh food online, in the same way that they purchase books and electronics.
"We have made changes to our service area and discontinued delivery to select zip codes," Amazon said via an emailed statement on Friday.
"AmazonFresh continues to serve customers across the US (Seattle, New York, Boston, Baltimore, Philadelphia, Washington DC, Chicago, Atlanta, Dallas, Miami, Denver, Los Angeles, San Francisco and more) and internationally (London, Tokyo and Berlin)."
After ten years in operation, Amazon Fresh didn’t grow quickly, and the company shifted more focus to its fast delivery service, Prime Now, which also offers grocery products.
Amazon is also experimenting with grocery pickup kiosks, where shoppers retrieve online orders from their cars – a concept suited to suburban areas, where grocery delivery is more expensive than it is in cities.
Groceries are key for Amazon to winning more market share from bricks-and-mortar competitors like Walmart, which uses food to get shoppers in stores, hoping that they also buy apparel, electronics and other items while shopping.
Last week, the online retail giant reported that net sales increased by 34%, to $43.7 billion, in the third quarter of the year, boosted by its Whole Foods acquisition.