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Amazon scales back Fresh deliveries

Written by George Anderson

Photo: RetailWire

Amazon.com’s acquisition of Whole Foods in August led many to speculate that the move would serve as a jumping off point for the company to expand its AmazonFresh delivery service. Instead, reports surfaced last week that Amazon sent notices to customers that it is ending home delivery of groceries in some areas. The e-tailer e-mailed customers within certain zip codes in nine states — California, Connecticut, Delaware, Maryland, Massachusetts, New Jersey, New York, Pennsylvania and Virginia — that the service was being discontinued. An Amazon spokesperson confirmed to Recode that the company will end the service in some places, but said it would continue serving other neighborhoods in cities including Boston, Chicago, Los Angeles, New York and Philadelphia. Amazon did not offer insight as to whether it intended to return in the future to areas where it is ending AmazonFresh deliveries. Online grocers going back to Webvan have had trouble achieving profitability and Amazon’s pullback suggests that it too is facing hurdles. One potential response would be for the company to open AmazonFresh Pickup locations like the two it operates in Seattle’s Ballard and SoDo neighborhoods. Whole Foods offers home delivery in 37 states and Washington, D.C. in partnership with Instacart. Amazon’s third quarter net sales increased 34 percent year-over-year to $43.7 billion, which includes $1.3 billion from Whole Foods. The company’s net income was $256 million for the period compared to $252 million last year.

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