Amazon And Sprouts Are Closing Grocery Stores
Posted on Wednesday, March 15th, 2023 at 7:00 am
Amazon announced Friday that it is permanently closing eight of its high-tech Amazon Go convenience stores, including two in Seattle. It’s the latest move by the tech giant to pull back on some its brick-and-mortar retail operations, GeekWire reported.
“Like any physical retailer, we periodically assess our portfolio of stores and make optimization decisions along the way,” an Amazon spokesperson said in an emailed statement.
The two impacted stores in Seattle are located downtown, in the Macy’s Building at 3rd Avenue and Pine Street, and at 4th Avenue and Pike Street. Both stores have been closed for some time, according to Amazon, and are located in a part of downtown that has been especially troubled by crime and open-air drug use.
Two stores in New York City and four in San Francisco will also close. The affected stores will continue to operate until April 1.
“We remain committed to the Amazon Go format, operate more than 20 Amazon Go stores across the U.S., and will continue to learn which locations and features resonate with customers as we keep evolving our Amazon Go stores,” the spokesperson said.
CNBC reported that Amazon executives previously confirmed the company would close some Fresh supermarkets and Go stores following its fourth-quarter earnings results. Amazon is also temporarily pausing expansion of the Fresh grocery chain until it can find a former that resonates with customers and “where we like the economics,”
According to CNBC, Amazon has been determined to crack the grocery segment since the launch of its first Fresh grocery delivery services in 2007. It made a historic splash when it acquired upscale grocer Whole Foods Market in 2017 for $13.7 billion, Amazon’s biggest acquisition ever.
Amazon is not the only company closing many of its grocery stores. Winsight Grocery Business reported that Sprouts Farmers Market will close 11 ‘underperforming’ stores.
Sprouts Farmers Market is closing 11 underperforming stores during the first half of the year, the health-focused grocer announced Thursday, while performing its fourth quarter and full-year earnings.
The locations for the stores slated for closure were not detailed, but all on the chopping block are about 30% larger than the grocer’s current prototype and “generate negative four-wall cash flow,” Sprouts CFO Lawrence “Chip” Molloy told analysts.
Sprouts says it doesn’t intend to re-open in new locations in the cities in which is it closing.
“You won’t see direct replacements coming in those geographies going forward because they’re probably in the wrong place,” CEO Jack Sinclair said. “As we’ve looked the store portfolio, the strategy playing out really made us take a very hard look at those stores that are a little bit bigger. The lovely stores that were built by the previous team… and in certain locations, we picked the wrong locations.”
No further store closures are planned, executives said.
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