Dive Brief:
- Amazon is permanently closing eight Go convenience stores — two in Seattle, two New York City and four in San Francisco — on April 1, a spokesperson from the company said in an email.
- Despite these closures, the company will “continue to open new Amazon Go stores,” and is “working closely with all affected employees to identify new roles” within the organization, the spokesperson said.
- Amazon shuttering more than a quarter of its Go stores highlights the company's ongoing challenges in building its physical retail footprint. Less than a month ago, it paused the rollout of its Fresh grocery stores.
Dive Insight:
The Amazon Go concept allows patrons to enter a store and exit with whatever goods they select without interacting with a cashier for payment. Cameras and sensors allow the company to charge the customer via a registered method of payment. Amazon has been expanding that checkout-free approach nationwide in recent years.
The Amazon Go store closures comes just weeks after it opened a location in Puyallup, Washington with a larger suburban-focused format. The retailer also opened a number of locations last year in Southern California. As of last month, Amazon operated 31 Go stores in total.
After the 8 closures next month, the company will have 23 Go stores, the spokesperson said.
When asked why Amazon has decided to shutter the eight stores in Seattle, New York City and San Francisco, the spokesperson said that like any retailer, Amazon periodically assesses its portfolio of stores and makes optimization decisions.
“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 most with customers as we keep evolving our Amazon Go stores,” the spokesperson said.
The closures continue a recent flurry of setbacks for Amazon’s physical retail segment. In early February, CEO Andy Jassy said during the company's recent earnings call that Amazon was halting its Fresh grocery store rollout as it figures out a way to better differentiate and improve its economics.
At the time, the company said it would close some Fresh and Go locations, but didn’t indicate how many. Amazon reported a 6% rise in physical store sales during Q4, according to its earnings report.
The high-flying e-commerce company has been in cost-cutting mode lately. Dating back to November of last year, Amazon has undertaken a series of layoffs — mainly for its retail employees — that has included 18,000 roles.
Amazon debuted its first cashierless Go store in Seattle in 2018. In addition to locations in Seattle, New York City and San Francisco, it also operates several stores in Chicago.
