Dive Brief:
- Amazon has shut down its Pantry program, effective Wednesday, a company spokesperson said. The news was first reported by Bloomberg.
- The company will transfer its assortment to the main Amazon.com store "so customers can get everyday household products faster, without an extra subscription or purchase requirement," the spokesperson said. Pantry subscription customers were notified of the change in December and received a refund for their monthly subscription fee.
- Shuttering the Pantry service streamlines Amazon's grocery offerings as it pushes ahead with its Amazon Fresh and Go Grocery stores and online rollout.
Dive Insight:
Amazon Pantry, which was founded in 2014 and up until recently known as Prime Pantry, was one of the company's earliest efforts to boost sales of packaged food and beverages. But the service never really took off with shoppers, and by shutting it down, Amazon makes clear that it intends to focus on its core grocery platforms, including its main site, Whole Foods stores, Go Grocery brand and fast-growing Fresh concept.
Amazon Pantry offered shoppers the chance to bundle together products like cereal, paper towels and coffee for a flat fee. While the company, like many online sellers, sold grocery products primarily in bulk packaging to justify shipping costs, Pantry allowed shoppers to buy center store items in the same packaging they'd find at their local grocery store — a model that's become increasingly less novel as grocers themselves have expanded online ordering.
Amazon converted Pantry into a subscription service in 2018 and made it available to non-Prime members. Under the new model, orders for both Prime and non-Prime members had a flat shipping fee, but Prime members could get unlimited free delivery on orders over $35.
The coronavirus pandemic boosted demand for Pantry, which temporarily shut down last March due to high order volumes. But Amazon is now going toe-to-toe with grocers through its new Fresh and Go Grocery stores and through same-day delivery and pickup options, making a shipping service like Pantry less relevant. The service's members can find all of the same products now at the main Amazon.com site.
Amazon continues to open new stores and expand same-day services. It now operates five Fresh locations, including four in California and one in Naperville, Illinois, that opened last month, with plans to open dozens of additional locations in the coming months. It's also continuing to open Whole Foods locations, and now offers pickup at all stores nationwide.
