Amazon To Shut 68 Physical Stores, Trading Books For Groceries And Apparel

Topline

Amazon plans to shut 68 brick-and-mortar stores—including two in the U.K., all 24 of its bookstores and over 30 “4-star” stores carrying all-purpose goods—marking a shift toward groceries and fashion.

Key Facts

In a move first reported Wednesday by Reuters, the retail giant plans to focus more on grocery stores, apparel stores and on Amazon Go, a chain of stores allowing customers to purchase goods without using a checkout counter, Amazon spokesperson Betsy Harden told the New York Times.

The change will not affect the company’s 38 Amazon Fresh grocery stores or the roughly 500 locations operated by Whole Foods Market, an Amazon subsidiary.

In 2018, the year after Amazon acquired Whole Foods and the year it opened its first Amazon Go store, the company reported that brick-and-mortar locations brought in about $17.2 billion, a sum that had diminished to $17.1 billion by 2021.

Later this year, Amazon hopes to open its first Amazon Style store in Glendale, Calif., where the company plans to allow customers to have clothes delivered directly to their fitting rooms using an app.

Amazon will help employees affected by store closures find new roles in the company, Harden told the New York Times.

Though the company announced in 2019 it would close down its Amazon Pop Up mall kiosks, nine remain open in seven states and the District of Columbia.

Key Background

Amazon began in 1994 as an online bookstore but has since diversified into selling everything from pharmaceuticals to cloud storage to car parts, reaching a value of $1.55 trillion. However, the online behemoth has struggled to break into in-person shopping, with locations depending on digital in-store advertising to turn a profit, Insider reported. In August, the Wall Street Journal, citing unnamed sources, reported that Amazon planned to open department stores similar to smaller versions of Bloomingdale’s or Nordstrom, possibly foreshadowing the Amazon Style project. Despite the closure of Amazon’s bookstores and 4-star stores, Harden said the company still holds a long-term commitment to physical retail.

Further Reading

“5 Reasons Why Amazon Go Is Already The Greatest Retail Innovation Of The Next 30 Years” (Forbes)