Amazon Ends Restaurant Delivery in Face of Fierce Competition
11 June 2019 - 08:29PM
Dow Jones News
By Sebastian Herrera
Amazon.com Inc. is shuttering its restaurant delivery service
Amazon Restaurants in the U.S., putting an end to a four-year
experiment that sought to compete with the likes of Grubhub and
Uber Eats but failed to gain much traction.
Amazon said it would discontinue the service on June 24 and that
the small number of employees who made up the division have found
new roles within the company or will be provided assistance with
finding new positions. Website GeekWire first reported the
move.
Seattle-based Amazon started offering restaurant delivery for
Amazon Prime members in certain ZIP Codes throughout its hometown
in 2015. The next year, it opened a similar business in the
U.K.
But the project failed to show significant growth. Amazon closed
its U.K. service late last year, and as of May, serviced more than
20 cities in the U.S., according to its website.
The demise of Amazon Restaurants is a rare logistical misstep by
a company that is a dominant force in e-commerce and prides its
delivery prowess. The rough-and-tumble food-delivery business is
swarming with competitors and is largely unprofitable.
Amazon faced fierce competition from market leaders such as
Grubhub Inc., Uber Technologies Inc. and DoorDash Inc., which
together own about 80% of the U.S. restaurant delivery sector,
according to research firm Edison Trends.
Amazon, however, is far from done with food delivery. In May,
British food-delivery company Deliveroo said it had raised $575
million in a round led by Amazon. As of then, Amazon's delivery of
Whole Foods Market groceries was available in 88 cities.
Write to Sebastian Herrera at sebastian.herrera@wsj.com
(END) Dow Jones Newswires
June 11, 2019 06:14 ET (10:14 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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