Economy

AmazonFresh grocery delivery service ends in some U.S. cities

Amazon Fresh customers in parts of New Jersey, Pennsylvania, Delaware, Maryland and California have reported receiving the notices, either directly to Recode or in posts on social media. According to Recode, residents of Philadelphia and Los Angeles also reported their service will end.

Amazon plans to end its Fresh service in select areas around the country on November 30, according to Reuters. After the subscription, fresh groceries and frozen foods are open to customers along with some general merchandise with same day delivery or the next morning, if an order is placed later in the day.

A spokeswoman of Amazon confirmed that the Fresh is ending the services in parts of these states, but also made clear about the fact that the services would continue serving in the areas of big cities like Boston, Chicago, New York, and also Los Angeles and Philadelphia, between other metropolises.

A company spokesperson said the AmazonFresh closures were unrelated to the Whole Foods deal. Food Dive reached out to Amazon for further clarification, though a representative was not immediately available.

The service of Amazon Fresh launched only a decade ago in Seattle, and didn't enlarge to others cities for over five years. Over the next several years, Amazon rolled the program out to just a handful of cities, including a few global ones like Paris, Tokyo and Berlin. Delivery is inefficient, margins are slim, and building and maintaining cold storage facilities is incredibly expensive. So its decision to scale back comes as a bit of a surprise.

Just last week, Amazon announced strong quarterly results, calming down the concerns that investors had about the impact of Whole Foods' acquisition on Amazon's business. Whole Foods Market, which Amazon acquired in August for $13.7 billion, is expected to play a key role in Amazon's grocery delivery going forward. It was largely seen as one impulsion in acquiring Whole Foods. Olsavsky did not answer the question directly, but said that the acquisition of Whole Foods gives them many opportunities to expand into other categories.



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