Dive Summary:
- Amazon.com Inc. expanded its AmazonFresh same-day and early-morning grocery delivery service to select Los Angeles ZIP Codes on Monday.
- The service, which offers more than 500,000 products, has been running in the online retail giant's hometown of Seattle since 2007, and analysts predict the service will hit two dozen other markets by the end of 2014.
- The $6 billion online grocery market has struggled to combat lukewarm consumer interest, as many people prefer buying groceries they can view in person and were wary of delivery charges and membership fees, but IBISWorld Senior Retail Analyst Nikoleta Panteva predicts a stronger hiring market and increasing disposable income will draw consumers away from traditional grocers.
From the article:
... Ken Simril, chief executive of Fleischmann's Vinegar Co. in Cerritos, said the food delivery service could encounter growing pains such as expensive fuel in the congested Southland and trouble navigating delivery trucks through tight hill and beach roads. In addition, the grocery industry is notorious for high costs and slim profits, he said.
"Amazon's done a great job in the e-commerce space, but it's different when you're dealing with perishables," Simril said. "They may have some new secret sauce to deal with it, but if they're planning to just throw money and assets at the logistical challenges like everyone else, good luck." ...