Amazon Ends Restaurant Delivery in Face of Fierce Competition

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 [e-mail]

(END) Dow Jones Newswires

June 11, 2019 06:14 ET (10:14 GMT)

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