Amazon supersizing its food delivery business?
The company is set to expand a Seattle-only grocery business to LA and SF, with a much broader rollout possible if the larger West Coast effort goes well, according to a report.
Never mind the books, movies, music, computer gear, and whatever else you might buy from Amazon. How about a nice banana?
The e-tail giant is seriously considering a big move into the grocery-delivery business, according to a report.
The company is set to expand its Seattle-only AmazonFresh service to Los Angeles as early as this week and to the San Francisco Bay Area later this year -- with launches in 20 other urban areas in the U.S. and abroad contingent on the success of the LA and SF businesses -- Reuters reports, citing two unnamed sources.
It's true that fresh food doesn't stay fresh for long, and that the banana you ordered three paragraphs ago can also get easily bruised in transit. Those facts make an online grocery business a risky prospect (just ask Web 1.0 casualty Webvan). But Amazon is hoping to make its profit from other items ordered at the same time as groceries, according to another Reuters source, supermarket analyst and consultant Bill Bishop, who told the news service that Amazon is eyeing as many as 40 markets.
"Amazon has been testing this for years and now it's time for them to harvest what they've learned by expanding outside Seattle," Bishop is quoted as saying.
Reuters also notes that, aside from the threat posed to supermarkets and other food purveyors by a giant like Amazon taking a bite out of the market, the e-tailer's grocery effort could ultimately touch FedEx, UPS, and other package pushers: Amazon will deliver the edibles with its own vans, and success on the grocery front could lead to a broad network of company delivery trucks, which could handle nonfood items as well, Reuters says.
We've contacted Amazon for comment and will update this post with any info we get from the company.
Update, 12:58 p.m. PT: Adds details.