Amazon Blaming USPS for Closure of Fresh in Nine States

Amazon has laid the blame for its recent decision to pull Amazon Fresh out of nine states at the feet of the U.S. Postal Service, according to a report in Recode, citing various service issues.

The report stated that the issues, including late or missed deliveries, were occurring in most, if not all of the affected areas where service was pulled back in November.

Another issue for Amazon was a lack of delivery density in the affected areas, making the economics of same-day grocery delivery more difficult, the report stated. Amazon told Recode that the pullback was unrelated to the company’s $13.7 billion acquisition of Whole Foods in June.

Amazon Fresh costs $14.99 per month, in addition to the $99 per year Amazon charges for Prime. Orders placed in the morning are delivered the same day, with late orders pushed to the following morning.

The service was created in 2007 but not expanded beyond Seattle until 2013. It has since grown to several cities in California and a number of major metros including New York City, Boston, Philadelphia, Chicago, Dallas and Miami.

You can read the entire report here.

MCM Musings: This pullback by Amazon is a boon for competitor Instacart, the leader in delivery of online grocery orders, which has signed up 120 new accounts since the Whole Foods deal. In fact, the CEO of Instacart took a not-so-subtle shot at Amazon in an interview with TheStreet.com. The economics and logistics of operating in this sector of ecommerce delivery are in fact particularly difficult, given the perishable nature of the products and the actual handling and packing.

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