Executive Briefings

Is Amazon About to Enter the Grocery Delivery Business in California?

Building a profitable service is difficult because grocery stores have painfully low margins. Remember dot-com flameouts HomeGrocer and Webvan? Peapod, a pioneer in the space, still delivers in such cities as Chicago, New York and Philadelphia, but recently it's resorted to opening actual pickup locations to make the model work. FreshDirect has come as close as anyone to building a brand around home grocery delivery, but it remains small, operating primarily in the New York area. Yet, Amazon seems poised to move into the business in at least two California cities.

Amazon has quietly worked to hone the service, called AmazonFresh, in Seattle, its home base. (It started the service before it introduced the very first Kindle.) It has kept adding trucks, staff and product, and internally, according to people with knowledge of these conversations, execs are constantly debating the wisdom and timing of expansion. The Fresh team is growing: There are currently a handful of job openings on the Amazon career site. And Doug Herrington, Amazon's vice president of consumables, who oversees AmazonFresh, is clearly a believer in the grocery delivery business. He worked at Webvan from 1998 to 2001.

So Amazon's likeliest next move is to expand Fresh into a high-density metro area like Los Angeles or San Francisco.

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Keywords: retail supply chain, home delivery of food, perishable item delivery, grocery delivery to customers' homes, grocery last-mile delivery

Amazon has quietly worked to hone the service, called AmazonFresh, in Seattle, its home base. (It started the service before it introduced the very first Kindle.) It has kept adding trucks, staff and product, and internally, according to people with knowledge of these conversations, execs are constantly debating the wisdom and timing of expansion. The Fresh team is growing: There are currently a handful of job openings on the Amazon career site. And Doug Herrington, Amazon's vice president of consumables, who oversees AmazonFresh, is clearly a believer in the grocery delivery business. He worked at Webvan from 1998 to 2001.

So Amazon's likeliest next move is to expand Fresh into a high-density metro area like Los Angeles or San Francisco.

Read Full Article


Keywords: retail supply chain, home delivery of food, perishable item delivery, grocery delivery to customers' homes, grocery last-mile delivery