New things are on the horizon for Amazon, which has spent a good portion of the last few years
taking over the world expanding rapidly. After the company purchased Whole Foods in 2017 for nearly $14 billion, it focused its efforts into pivoting into the food & beverage industry. Now the company has announced that it plans to discontinue its food delivery service, Amazon Restaurants. The service, which started in 2015, was Amazon’s version of delivery services like Postmates and Grubhub. Amazon shut down Amazon Restaurants in London just last fall, so this move is unsurprising for the U.S. version.
The announcement of Amazon Restaurants came in 2015, and soon after the program launched in Seattle that year, it expanded to more than 20 cities throughout the United States. Soon after, it expanded to London. The program let Prime members order food from partnering restaurants in their area. Sometimes, the restaurants would offer discounts. Orders would be delivered soon after, and could be placed either through Amazon Restaurants or the Prime Now app. Now the company will be shutting down its Amazon Restaurants program by the end of the month.
“As of June 24th, we will discontinue the Amazon Restaurants business in the US,” the company said in a statement that was issued to GeekWire. “Many of the small number of employees affected by this decision have already found new roles at Amazon, and others will be provided personalized support to find a new role within, or outside of, the company,” continued the statement. With the shut down of Amazon Restaurants also comes the end of Daily Dish. The program was a service that Amazon made to serve workplaces specifically.
Amazon hasn’t said exactly why it’s chosen to close Amazon Restaurants. The food delivery market is massive, but very saturated. Companies like HelloFresh, Blue Apron, and Daily Harvest dominate the delivery grocery industry. Meanwhile, Grubhub, Seamless, and Postmates have covered good ground among the delivery meal services around the country. Even grocers like Walmart and Kroger have ramped up their delivery and pickup programs.
New Amazon Innovations
Amazon could likely be shutting down less lucrative opportunities like Amazon Restaurants to focus its efforts elsewhere. The company recently announced that it’s made massive progress toward creating the first ever delivery drone. Drones would open up the delivery program to be able to deliver packages to consumers in as little as thirty minutes. However, strict FAA regulations and guidelines have made it hard to create a powerful, safe machine that won’t obstruct other aircraft. It’s latest innovation could, finally, put Amazon in first place in the race for drone delivery.
Amazon has also promised that most of its customers will be seeing even faster deliveries in the coming months. The company has invested millions of dollars into its shipping infrastructure. It’s done this in an effort to maintain customers that were choosing to switch to Walmart instead. Walmart recently announced a new program for free, one-day shipping on all orders over a certain dollar amount. This took customers from Amazon because no membership was needed to qualify for the shipping speeds.
Amazon countered back, offering free one-day shipping on all Prime orders starting as soon as possible. Advances in shipping speeds are expensive, but worth it for a company that depends fully on online shopping.