Amazon will close its brick-and-mortar stores in the US and the UK, as well as its pop-up shops in various markets.
The retailer, which began its life as an online bookseller, launched its first physical bookstore in Seattle back in 2015, then steadily expanded its brick-and-mortar footprint to include more locations across the U.S. and abroad, including in U.S. states like Arizona, California, Colorado
The stores didn't just provide a place for customers to interact with Amazon merchandise in real life, including its hardware devices, they also served as a convenient spot to pick up merchandise bought online or make returns. Amazon's retail footprint expanded to include Whole Foods with the acquisition of the grocery store. Amazon has been testing its Just Walk Out cashierless shopping technology at a growing number of Amazon Go convenience stores.
The company told the news agency that it will inform shoppers of the upcoming closings through in-store signs. It said it was trying to find new jobs for employees who were impacted, or offer them severance.
The decision to exit so much of its brick-and-mortar business follows a couple of years that have made in-person retail more challenging for everyone, as the COVID pandemic sent more consumers online as foot traffic to local stores declined. At a time when Amazon retail workers had begun to organize, this decision also comes at a time. Insider reported that the retail workers demanded better wages, more flexible attendance policies, longer breaks and other benefits as a result of the union push.
It seems that the company doesn't value its physical retail business and that's why it shut down dozens of stores immediately after such demands. Amazon said it will continue to work on cashierless grocery stores and other new concepts, like the recently opened physical clothing store in LA called Amazon Style.
Amazon made billions from its brick-and-mortar stores, despite a small part of its broader retail business. The company's physical retail business generated $4.78 billion in the fourth quarter of 2021, up from $4.02 billion in the year-ago quarter. The opening of the first Starbucks Pickup with Amazon Go store in New York, and plans for two more such stores in 2022, are some of the retail developments in the quarter.
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