Amazon.com Inc.’s AMZN Prime membership is getting bigger and better in the U.S. as the one-hour restaurant delivery service reached Baltimore. This is the second city were the service is being offered by Amazon.
In September, the Amazon Prime Now same-day delivery service was expanded with the addition of restaurant delivery in Seattle.
Amazon’s Restaurant Delivery Service in Baltimore
The service allows Amazon Prime members to view the menu and order food from the listed restaurants through Prime Now app. The listed local are City Cafe, HomeSlyce, Indigma, Locust Point Steamers, Matsuri, Shiso Tavern and The Helmand, among others. An order-tracking facility has also been added to the app.
As of now, the restaurant delivery service is available in 10 Baltimore zip codes. Prime members can download the app or visit amazon.com/primenow to check if their area qualifies for the service. Customers will be able to see the names of the restaurants on the home page if their area is covered under the delivery service. More restaurants will be added to the service soon.
Competitors
A lot of companies are trying to alter the face of the food delivery service in the same way that tech start-ups like Uber changed the taxi industry. In addition to GrubHub and Postmates, the online retail giant faces competition from Sprig, Munchery and Spoonrocket.
Companies like GrubHub and Postmates allow consumers to order meals through smartphone apps from a range of restaurants and have it delivered to their homes.
All these companies are going after the 365,000 autonomous U.S. food joints, which garner about $70 billion through takeouts each year, per GrubHub’s latest annual report.
Amazon Prime Now
In Dec 2014, Amazon rolled out the one-hour delivery service in a small area in Manhattan. Amazon Prime Now delivers household items, alcoholic beverage and now restaurant food in Seattle and Baltimore. Prime Now members can browse and purchase items through a dedicated app and have the orders delivered in two hours for free or in one hour by paying an extra $7.99.
Going Forward
The food delivery business has razor-thin profit margins and complicated logistics. However, considering Amazon’s own fleet of delivery trucks and vast experience in logistics and distribution, we believe it is well-equipped to compete with other mobile food delivery players, like GrubHub and Eat24.
Amazon currently has a Zacks Rank #2 (Buy).
Other stocks in the same space that investors may consider are Stamps.com Inc. STMP, Travelport Worldwide Limited TVPT and Blue Nile Inc. NILE. While Stamps.com and Travelport carry a Zacks Rank #1 (Strong Buy), Autobytel carries the same Zacks Rank as Amazon.
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