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Amazon, in rare defeat, to end its U. S. restaurant delivery service

June 11, 2019 / 12:46 PM / AP

Amazon is closing its U. S. restaurant delivery service, a 4-year-old business that failed to take off amid fierce competition from Uber Eats, DoorDash and others.

The service, called Amazon Restaurants, offered delivery in more than 20 cities in the U. S. It expanded into the United Kingdom, but Amazon shut down the service in that country late last year. The closure of the U. S. business, which was first reported by technology news site GeekWire, will happen on June 24.

Still, Amazon. com Inc. has shown interest in delivering meals to diners' doorsteps. Last month, it bought a stake in British food delivery company Deliveroo, whose kangaroo logo is a common sight on bicycles and scooters in Britain.

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Amazon Restaurants was a tiny player in the U. S., taking about 2% of the market, according to Jeremy Scott, a food and restaurant analyst at Mizuho.

He said Amazon didn't promote the delivery service enough and didn't have deals with big fast food chains. Uber Eats, for example, delivers Big Macs from McDonalds; DoorDash has a partnership with Wendy's; and Grubhub delivers Taco Bell chalupas and buckets of KFC's fried chicken.

With Amazon out of the restaurant delivery business, analysts said others could pick up the crumbs. Shares of Grubhub Inc. soared 7% Tuesday, for instance.

But Scott thinks Amazon, which also owns grocery chain Whole Foods, isn't abandoning the food delivery business altogether. "The shuttering of the platform doesn't necessarily mean that Amazon won't eventually invest in the space," he said.

First published on June 11, 2019 / 12:46 PM

© 2019 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

Amazon's restaurant delivery service debuts in Nashville

There’s a new player in Nashville’s already crowded restaurant delivery scene — Amazon.

The retail behemoth launched its Amazon Restaurants service Tuesday in Nashville, joining competitors Uber Eats, Postmates, Grubhub, DoorDash and more, which are all vying for market share in the booming $17 billion online food delivery sector.

“Nashville is one of the country's most up-and-coming food destinations, with popular restaurants serving classic Southern favorites as well as diverse international cuisine,” said Jerry Rapisarda, general manager of Amazon Restaurants. “Now residents and visitors can enjoy that food from the comfort of home — or wherever they are — using their Amazon account.”

Starting 8 a. m. Tuesday, Amazon Prime members can visit amazon. com/restaurants or use their Amazon or Prime Now apps to see if delivery is available to their zip code. You can browse menus, place orders and track the status of the delivery in real time.

More than 100 restaurants available on launch

Delivery fees range from $1.99 to $6.99 and customers have the option to tip their drivers, said Annette Promes, director of marketing for Amazon Restaurants. She said the food is delivered within one hour or less.

Promes said the service will launch in Nashville with more than 100 restaurant partners. Those restaurants include: Virago, Saint Anejo, Whiskey Kitchen, Moto, Chauhan Ale & Masala House, Tansuo, The Mockingbird, Pepperfire Hot Chicken, 417 Union and Prince's Hot Chicken Shack South.

“We’re always adding new restaurants at any given point in time,” Promes said.

Amazon Restaurants operates in more than 20 major U. S. markets, including Atlanta, Chicago, Los Angeles, New York City, Phoenix, Seattle and Tampa. The company ended its restaurant delivery service in London late last year.

Food delivery companies across the U. S. are fueling consumers’ desire for convenient meals at home. With a few taps on a smartphone, people can eat what they want, when they want, without leaving the house. The industry is forecast to grow from nearly $17 billion in 2018 to more than $24 billion in 2023, according to Statista.

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Delivery becoming a 'must have'

Food service delivery sales have grown 20 percent since 2012, despite overall weakness in the U. S. restaurant industry, according to The NPD Group.

“Delivery has become a need-to-have and no longer a nice-to-have in the restaurant industry,” said Warren Solochek, NPD’s senior vice president of industry relations. “Restaurants need delivery in today’s environment in order to gain and maintain share. It has become a consumer expectation.”

Also in Nashville, Amazon offers its ultra-fast Whole Foods grocery delivery service for Amazon Prime members. Those members pay $119 a year for free two-day shipping through Amazon, access to Amazon's video streaming service and other benefits.

Amazon Prime customers can take $10 off their first two orders with Amazon Restaurants with the promo code 10EAT10 at checkout. See amazon. com/save10 for more details.

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