The grocery retail sector is facing challenging times dealing with rising labor and product costs, changing consumer behavior, fading customer loyalty, and problems with theft.
These economic issues have prompted grocery chains to re-evaluate their growth plans as certain companies have closed locations and, in some cases, canceled expansion plans.
The parent company of popular discount grocery store chain Grocery Outlet revealed in February that it is canceling 23 store leases of unopened stores in suboptimal locations, 15 of which were planned to open in 2025 and eight that were planned in 2026, as part of a restructuring plan that began in the fourth quarter of 2024.
Related: Huge mall retailer considers bankruptcy and closing all stores
Grocery Outlet Holding Corp. (GO) also said that it would cancel capital-intensive warehouse projects and instead invest in lower-cost distribution centers for dry goods. The company reported it also informed 40 employees that they would be laid off in the first quarter of 2025.
And now comes Amazon, which has been the king of e-commerce sales since founder Jeff Bezos launched the company in September 1995 as an online bookseller.
For almost 30 years, the company has expanded its scope of retail concepts to almost every product a person could imagine, including music, computer and video games, toys and hobbies, beauty store, camera and photo store, wireless phones, office products, new-car buying service, online auctions, travel store, and much more.
More closings:
- Popular retail chain to close unprofitable store locations
- Bankrupt retail chain unloads store leases, key asset
- Popular discount retailer files bankruptcy, closes all stores
Amazon’s internet sales platform devastated the brick-and-mortar retail landscape as several retailers couldn’t compete with the online selection of products that the high-tech firm offered and the speed with which it could deliver goods.
Many retailers filed for bankruptcy and went out of business, including bookstore chains Borders and Waldenbooks and video and music chains Blockbuster Inc., Hollywood Video and Music Gallery.
Amazon opens brick-and-mortar stores
By 2015, Amazon changed its attitude toward brick-and-mortar retail as it began to open storefronts, starting with its Amazon Books stores which grew to 24 locations before completely shutting down in 2022.
The company did not give up on brick-and-mortar as it in 2017 purchased Whole Foods and in 2018 launched another concept with Amazon Go convenience stores, with the first location in Seattle.
In 2020, the company became more ambitious and launched its Amazon Fresh grocery chain.
Amazon’s foray into brick-and-mortar stores, however, has not produced the results it was hoping for.
Amazon Fresh closes stores
Amazon (AMZN) has confirmed that it closed one of its Amazon Fresh store locations in Manassas, Va., on March 16, and plans to close another store in Thousand Oaks, Calif., on April 27, Chain Store Age reported.
Related: Huge auto parts chain closes over 700 stores
The Amazon Fresh closings come close on the heels of Amazon’s Feb. 26 closing of its Amazon Go convenience store location in Woodland Hills, Calif. The giant retailer in October 2024 closed three of its New York Amazon Go stores and currently operates 15 locations, half as many as the 30 it had at its peak.
Amazon currently operates 61 Amazon Fresh stores nationwide and will open a new location in Silver Spring, Md., on March 27. The online retail goliath opened its first brick-and-mortar Amazon Fresh store in Woodland Hills in 2020.
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