Amazon Scales Back Fresh Grocery Delivery After Whole Foods Deal

  • Customers in several states got emails that service will end
  • Online retailer keeps refining grocery strategy with options

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Amazon.com Inc. is scaling back its grocery delivery service Amazon Fresh in parts of at least seven states, tweaking its strategy after buying Whole Foods Market in June.

The states affected are New York, New Jersey, Pennsylvania, Maryland, Virginia, Connecticut and California. Amazon launched the Fresh delivery service a decade ago in Seattle, which was its first foray into the $800 billion grocery market and an attempt to get shoppers to buy fresh food online the same way they purchase books and electronics.

"We have made changes to our service area and discontinued delivery to select zip codes," Amazon said in an emailed statement Friday. "AmazonFresh continues to serve customers across the U.S. (Seattle, New York, Boston, Baltimore, Philadelphia, Washington D.C., Chicago, Atlanta, Dallas, Miami, Denver, Los Angeles, San Francisco, and more) and internationally (London, Tokyo, and Berlin)."

After 10 years in operation, Amazon Fresh didn’t grow quickly and the company shifted more focus to its fast delivery service Prime Now, which also offers grocery products. Amazon is also experimenting with grocery pickup kiosks where shoppers retrieve online orders from their cars, a concept suited to suburban areas where grocery delivery is more expensive than in cities.

Groceries are key for Amazon to winning more market share from brick-and-mortar competitors like Wal-Mart Stores Inc. that use food to get shoppers in stores, hoping they also buy apparel, electronics and other items while shopping.

Reuters earlier reported on the move to pare back Amazon Fresh in some states.

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