This appears to be a tactical retreat. Amazon is very much interested in the food delivery business.
In a significant development that underscores the intensity of the competition existing in the food delivery business, Amazon.com Inc stated it will end its U.S. restaurant food delivery service on June 24.
“A small fraction of Amazon employees are affected by this decision, and many of those affected have already found new roles at Amazon,” said the company in a statement. “Employees will be offered personalized support to find a new role within, or outside of, the company.”
In 2015, Amazon.com Inc launched Amazon Restaurants in Seattle. It was designed to provide Prime members a way to order meals apart from groceries and products. Since then the service was expanded to more than 20 U.S. cities. It was also extended to London, but Amazon.com Inc closed the program there in November 2018.
Despite this closure, Amazon still has ambitions in the food delivery business. In May 2019, it took a stake in British online food delivery company Deliveroo, leading a $575 million fundraising.
With the news reaching the market, Amazon’s shares moved up by 0.4%, while GrubHub rose 8.6%.