Amazon.com spent more than five years testing Amazon Fresh in the Seattle area only and finally introduced the grocery delivery business to Los Angeles last month.
But despite the expansion, the company is still adamant about calling Fresh a pilot project. On the company’s earnings call today, Amazon CFO Tom Szkutak was asked straight-up by Youssef H. Squali of Cantor Fitzgerald if the Fresh business was profitable yet.
Szkutak said that “we’re not breaking out financials,” and reiterated that the Fresh project is still in its very early stages, despite being out on the streets since 2007.
“Keep in mind that Fresh was designed as a pilot,” he said. “Certainly the economics have improved through invention on behalf of the team there, as well as operating efficiencies. Again, that was set up as a test, which enabled us to launch in Los Angeles.”
Szkutak was asked about Fresh again earlier during the call and said that it’s still a “challenge” to make the service economically viable.
“We like what we see so far, but it’s still very, very early,” he said.
Amazon Fresh has been one of the longest trial runs in technology history, rivaling the Gmail beta in duration, which is a testament to Amazon’s willingness to take the long view. After watching failed delivery companies like Webvan and HomeGrocer, Amazon has taken its sweet time and “tinkered” with the economics to come up with a workable formula.
From the delivery bags to the pricing structure, the Amazon Fresh experience in 2013 has changed quite a bit from when it launched in 2007. GeekWire’s Todd Bishop recently reviewed the service and wrote about the great convenience and high prices.
Amazon posted its second quarter earnings this afternoon and reported a net loss of $7 million, or $0.02 per diluted share. That missed analyst estimates, which expected Amazon to post $28.3 million in net income.
