Following November’s closure of Amazon’s restaurant delivery business in London, the company is now shutting down operations in the U.S. The service, which was launched back in fall 2015, was designed to give Prime members another perk — a way to order meals, not just products and groceries — through the e-commerce giant.
But the service has faced much competition, including from local rivals like Grubhub, Uber Eats, DoorDash and Deliveroo (which Amazon invested in) in London, among others. In some cases, they would even discount their services in order to win market share. Amazon, meanwhile, has largely failed to establish itself as a significant player in restaurant delivery in both market share and consumer mindshare. It’s not the first name people think of when they’re looking to order food for lunch or dinner, and the logistics of delivering hot meals in a timely fashion introduces a different set of concerns that go beyond Amazon’s core focus areas.
Related to the closure, Amazon will also shutter workplace lunch delivery service Daily Dish, according to GeekWire, which broke the news.
Amazon made the decision to exit restaurant deliveries to focus more on its growing grocery delivery business, we understand.
TechCrunch (among others, we’re guessing) was tipped off to the closure through a source at Amazon familiar with the business’s closing. Amazon confirmed the closure of Amazon Restaurants in the U.S., which ceases to operate June 24. It also hinted that layoffs were involved, as some people were finding new roles at Amazon while others were being assisted in finding new jobs outside the company.
“As of June 24th, we will be discontinuing the Amazon Restaurants business in the U.S.,” an Amazon spokesperson said. “A small fraction of Amazon employees are affected by this decision, and many of those affected have already found new roles at Amazon. Employees will be offered personalized support to find a new role within, or outside of, the company,” they added.
Amazon’s decision to exit restaurant meal delivery has had a positive impact on rivals’ stocks this morning, with a jump by Grubhub, which was up more than 5% on the news.
By Sarah Perez