An worker arranges a salad dressing display at an Amazon Fresh food market on December 12, 2024 in Federal Way, Washington.
David Ryder | Getty Images
Amazon is closing 4 more Fresh supermarkets in Southern California because the e-commerce giant continues to focus its grocery strategy around Whole Foods and delivery.
The closures will happen in the approaching weeks, Amazon confirmed to CNBC. They follow the shuttering of 4 other U.S. locations in recent months, in Washington, Virginia, Recent York and a Los Angeles suburb.
“Certain locations work higher than others, and after an assessment, we have made the choice to shut these Amazon Fresh locations,” Amazon spokesperson Griffin Buch said in a press release. “We’re working closely with affected employees to assist them find latest roles inside Amazon wherever possible.”
At one Fresh supermarket in La Verne, California, employees were told to assemble for an all-hands meeting on Wednesday, based on an internal message viewed by CNBC. They learned on the meeting that the shop would close in mid-November, and that employees would receive a severance package, based on an individual aware of the matter who asked to not be named because the small print were confidential.
The opposite three stores which can be closing are in cities of Mission Viejo, La Habra and Whittier.
Last week, Amazon said it intends to shut 14 Fresh grocery stores within the U.K. and convert its five other locations there into Whole Foods markets.
Amazon said it repeatedly evaluates its store portfolio, which may result in opening, reopening, relocating or closing certain locations. Within the U.S., the corporate has greater than 60 remaining Fresh stores. Last 12 months, the corporate removed its “Just Walk Out” cashierless technology from the stores. It is also been culling its footprint of Go cashierless convenience stores.
Amazon has been determined to develop into a serious grocery player for nearly twenty years. The corporate launched Amazon Fresh in 2007, then a pilot project for fresh food delivery, before acquiring upscale chain Whole Foods for $13.7 billion in 2017, its biggest purchase on record.
Amazon debuted its Fresh grocery chain in 2020, with an eye fixed toward mass-market shoppers. The rollout has been turbulent since its early days.
The corporate opened a flurry of Fresh locations by 2022, however the expansion plans bumped into CEO Andy Jassy’s widespread cost-cutting efforts as the corporate reckoned with the impact of rising rates of interest and soaring inflation. In 2023, Amazon announced it could shut some Fresh stores and halt further openings temporarily because it evaluated the way to make the chain stand out for shoppers.
While it’s closing Fresh stores, Amazon continues to “innovate and put money into making grocery shopping easier, faster, and cheaper,” Buch said. The corporate still maintains 500 Whole Foods locations and has opened mini “day by day shop” Whole Foods stores in Recent York City.
Buch said that Amazon serves 150Â million U.S. customers with hundreds of thousands of “grocery and on a regular basis essentials available for online delivery, pick-up, or in store shopping.”
On Wednesday, Amazon also launched a brand new “price-conscious” grocery brand that can be offered online and in its physical stores. And last month, Amazon expanded same-day delivery of fresh foods to more pockets of the U.S.
Jassy and other company executives have touted the success of sales of “on a regular basis essentials” inside its online grocery business, which refers to items resembling canned goods, paper towels, dish soap and snacks. Jassy told investors at the corporate’s annual shareholder meeting in May that he stays “bullish” on grocery, calling it a “significant business” for Amazon.
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