Amazon is closing its Restaurants service

Date : 13 June 2019

Amazon has announced it will close its US Amazon Restaurants delivery business, as reported by GeekWire.

Closure of the service

Amazon is set to close its Amazon Restaurants service later this month. The food delivery service launched in Seattle in 2015, offering Prime members meal delivery using the Amazon Restaurants website or via the Prime Now app. Amazon Restaurants was available across more than 20 cities in the US, and was later expanded into London. The closure of the service follows Amazon’s decision to end Amazon Restaurants in the UK in November 2018. Amazon’s workplace lunch delivery service, Daily Dish will also end this month.

A competitive market

In the US, Amazon has faced much competition in the growing meals delivery market from local competitors including Grubhub, Uber Eats and DoorDash. The online takeaway market is competitive and requires scale. Shoppers want choice, convenience and value. Operators therefore have to attract partner restaurants and do this by providing additional services, such as, last mile delivery or support with recipe and meal planning. They also have to invest to acquire customers through discounts.

The market is important for Amazon as it has a high frequency of purchase and the Amazon flywheel model relies on traffic to the website. The news follows Amazon’s significant investment in food courier company Deliveroo. As previously demonstrated with its acquisition of Whole Foods Market, Amazon is willing to invest significantly to achieve scale quickly.

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