Amazon.com, Inc. announced on Wednesday that it would shut down its physical stores, 4-star and Pop up shops, to focus on the grocery sector.
The world’s largest online retailer plans to close 68 brick-and-mortar kiosks across the US and UK. This move will end some of its longest-running retail experiments.
Previously, Amazon has gradually unveiled an array of brick-and-mortar concepts, starting from supermarkets to retail stores.
For instance, the 4-star chain, in particular, attempted to connect Amazon’s in-store and offline operations. It featured the top-selling products in its web store.
However, the sales growth of the physical stores unit significantly lagged the company’s overall retail business.
In line with this, Amazon reduces its physical retail footprint after coming off its slowest quarterly growth rate since 2001.
In the last earnings report, the business only posted a 3.00% increase to $137.00 billion in sales.
Subsequently, its Whole Foods and Fresh outlets posted lower sales in 2021 than in 2018.
Notably, its shares edged down 10.77% or 367.04 since the start of 2022.
Correspondingly, the company explained that the closure dates would vary by location. Then, it ensured to help affected employees find roles elsewhere in the firm.
Meanwhile, workers who do not want to stay will receive severance packages.
The news was a turning point for a company that started as an online bookseller. Initially, it drove established rivals such as Borders Group to bankruptcy.
Analysts noted that Amazon made the right move to forgo the niche market of brick-and-mortar book shoppers.
Still, the company said that it would remain committed to building long-term physical retail concepts and technologies.
The firm recently unveiled an Amazon style apparel store, the first foray into physical clothing units.
Amazon vows logistics support for Ukraine
Meanwhile, Amazon also pledged to use its logistics capability to deliver supplies in the war-stricken Ukraine.
At the same time, it will also provide cybersecurity expertise to help the Ukrainian government and companies.
Amazon Chief Executive Andy Jassy said that the firm stands with the people of Ukraine following Russia’s invasion.
Earlier this week, the US internet giant stepped in to support humanitarian organizations on the ground.
Amazon said that it would donate up to $10.00 million, the latest heavyweight business to mobilize in offering aid.
Furthermore, Danish toymaker Lego also contributed $16.00 million as crypto giant Binance gave $10.00 million.
