business news in context, analysis with attitude has a report about Amazon Fresh, the grocery delivery service that the e-tailer has been testing for more than two years in Seattle, using a local distribution center and 20 trucks to ferry fresh and packaged foods to 49 zip codes all over the city.

Doug Herrington, Amazon’s vice president of consumables, continues to describe the program as a “pilot,” and says that they are “working to see if we can figure out how to make the economics work. It’s a financially difficult business.”

According to the site, while Amazon knows the upside potential of the grocery business is huge, it “also is well-versed in the pitfalls of grocery delivery, having watched two of its dot-com era investments, and (later acquired by Webvan) flame out in the dot-com bust. (Herrington, the Amazon executive overseeing Amazon Fresh, worked for Webvan.)
KC's View:
We’ll know when they’ve made the economics work when they announce they’re expanding beyond Seattle. The guess here is San Francisco or Los Angeles. And it probably is a good bet that it happens before the end of 2010.