Hershey Kisses Good-Bye E-Commerce

Concluding that "its current (E-Commerce) business model is not sustainable," Hershey has shut down its direct-sale Web site, killing the jobs of about a dozen Web employees. But whether this is more of an E-Commerce issue for the $5 billion chocolate maker or a channel conflict issue is unclear.

Hershey's chocolates will apparently continue to be sold by a wide range of online retailers, suggesting that the nation's largest chocolate company was simply cleaning up its channels, finding little extra profit in selling product directly. The site closure is "a strategic decision. Our present business model is not sustainable and we will continue to evaluate all options in E-Commerce, including strategic partnerships and licensing agreements," said Hershey spokesperson Kirk Saville. But with many major retailers—including Canadian Tire and Borders--stepping back from E-tailing altogether, it's hard to not look hard at any multi-billion-dollar player pulling out of the Web business without some concern.