Amazon.com Inc. will close eight of its cashierless convenience stores as part of a broader plan to slash costs.
Four Amazon Go stores in San Francisco will close, along with two in New York City and two in Seattle, effective April 1.
“Like any physical retailer, we periodically assess our portfolio of stores and make optimization decisions along the way,” Amazon said in a statement to media. “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.”
In February, Chief Financial Officer Brian Olsavsky warned Amazon
AMZN,
would close some Go and Fresh stores “with low-growth potential” as the company looked to cut costs following its worst annual loss on record.
Amazon Go stores debuted in 2018 without cashiers or checkout lines, as customers paid automatically through a smartphone app. At the time, Amazon reportedly planned to open 3,000 such stores by 2021.
But pandemic shutdowns and a lagging economy have soured some of Amazon’s brick-and-mortar plans. Last year, the e-commerce giant closed dozens of its physical stores — including the Amazon 4-Star, Books and Pop Up lines — while refocusing on Amazon Fresh, Whole Foods Market, Amazon Go and Amazon Style stores.
Last year, Amazon announced plans to launch larger-format Go stores in suburban areas, and in February, Chief Executive Andy Jassy told the Financial Times that Amazon still wants to “go big” on certain physical stores.
Amazon announced it would lay off about 18,000 workers in January, and last week, the Seattle-based tech giant paused construction of its second headquarters in Arlington, Va.
Amazon shares are up 13% year to date, but have sunk 35% over the past 12 months. In comparison, the S&P 500
SPX,
is up 5% in 2023 and down 6.5% over the past year.
This post was originally published on Market Watch
