It
was four years ago that Amazon began offering its U.S. restaurant
delivery service, but it failed to garner any real attention with the
competition from GrubHub, DoorDash, Uber Eats, etc. In a rare move
for the popular Internet company, Amazon is shutting down the
service.
Amazon
Restaurants, which offered service in over 20 American cities and the
U.K, began shutting the service down last year, starting with the
U.K. area first. U.S. business closures will begin shuttering on June
24.
That
doesn’t mean the company is getting out of the food delivery
business altogether. In fact, Amazon.com, Inc. has pushed stake in
Deliveroo, a British food delivery company readily identified by the
kangaroo logo that’s commonly seen on scooters and bicycles.
Mizuho
food and restaurant analyst Jeremy Scott said Amazon restaurants had
just two percent of the food delivery service market in the U.S. He
boiled down the problem with not enough promotion and no deals with
the big-name fast food restaurants. For example, Uber Eats has an
agreement with McDonald's, DoorDash has an agreement with Wendy’s
and GrubHub partnered with KFC and Taco Bell.
According
to analysts, with Amazon bowing out of the industry, it leaves others
to pick up the pieces.
Scott doesn’t believe Amazon is forgetting the option of food delivery altogether, especially as it owns Whole Foods. He said the company might eventually come back and make a huge investment back in it.
