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Amazon said yesterday that it will pull its AmazonFresh grocery delivery service out of certain markets, including suburban New York, California, Maryland, New Jersey and Pennsylvania, according to a report from Reuters, which noted that “it continues to operate in more than a dozen cities from Los Angeles to Tokyo.”

Amazon said the move was unrelated to its acquisition of Whole Foods.

According to Reuters, “AmazonFresh started more than a decade ago but has yet to make a major dent in the $700 billion U.S. grocery market.”
KC's View:
I suspect that Amazon is being a little disingenuous when it says the Whole Foods deal has had no role in this decision. The presence of more than 400 stores - or mini-warehouses - that can serve an awful lot of communities does give Amazon other options.

I reached out yesterday to my Innovation Conversation partner Tom Furphy about this, and he said that this move makes sense where Amazon doesn’t “see a reasonable path to density and volume. The service as operating today likely can't drive acceptable volume and density (which determines profitability) in some areas.”

However, Tom added, this “doesn't mean they're giving up.”

Agreed. There are a lot of paths that Amazon can take to landing all this business … its recent moves have just illustrated that it is willing to use any of them to reach its goals.