Amazon Fresh is closing operations in multiple locations across nine states in the United States. The closures were revealed in emails to customers in Virginia, Delaware, Massachusetts, New York, Pennsylvania, California, Connecticut, New Jersey and Maryland informing them of discontinuation of the grocery delivery service.
According to Amazon, the service will be ceasing in several zip codes but the business will continue operating countrywide.
Amazon Fresh is a grocery delivery service that costs $15 per month in addition to the $100 that Prime members pay per year.
With Amazon’s acquisition of whole Foods, it”s clear that the company is growing its grocery business despite the difficulties Amazon Fresh is facing in an attempt to remain profitable. When Amazon finalized its acquisition of Whole Foods for $13.7 billion on August 28, the first move was to reduce of prices, and that seems to have brought results. According to Foursquare, there was a 25 percent surge in foot traffic across Whole Foods stores in the U.S. on Aug. 28 and 29. This data, drawn from shoppers’ mobile phones, was in comparison to a week earlier before the deal closed and discounts kicked in.
Amazon had indicated prior to acquisition that its Prime membership program would be integrated into Whole Foods including Amazon Lockers. In the pipeline also was making available through Amazon.com Whole Foods Market’s private label products for example 365 Everyday Value, Whole Foods Market, Whole Paws and Whole Catch. However the company continues to try out Amazon Fresh pickup which is a drive-up grocery service. The company unveiled two such stores in Seattle early in the year.
The growth in Amazon’s grocery business is evident with the third quarter earnings report indicating sales of $1.3 billion from Whole Foods. Amazon is working to integrate Prime to become the customer rewards program for Whole Foods as it moves to tighten its grip on loyalty.