Amazon.com, Inc. (NASDAQ: AMZN) has notified customers that their Fresh grocery delivery service is ending in a at least five states including New Jersey, Pennsylvania, California, Maryland, and Delaware. The Fresh service was first launched in Seattle in 2007 and has been struggling to grow the grocery ordering and delivery service since then. Amazon took 5 years to expand the service to a second city and continue to grow in other cities including international ones such as Tokyo, Paris, and Berlin. Problems for the company include inefficient delivery, expensive building and maintenance cold storage facilities, as well as slim margins.
Currently, Amazon Fresh customers pay $14.95 a month in addition to the $99 Prime membership program. The company has been experiencing poor performing service areas and is trying to increase their packaged grocery selection by lowering commission charging to their sellers. However, Amazon still is a major player in the $800 billion grocery industry by offering meal kits and reduced selling fees on produce costing less than $15 sold through the website. The company will continue being a huge threat to other retailers and increase their reputation for innovation and online retailing expertise.
“We have made changes to our service area and discontinued delivery to select zip codes,” an Amazon spokesperson confirmed to GeekWire. “AmazonFresh continues to serve customers across the U.S.”