It’s official, Amazon can’t compete with the bricks and mortar retailers it has been attacking for years and forcing to either close, change or move in different directions to escape the jaws of the online giant.
Reuters was forced to report the move which will see Amazon closing all but its WholeFoods supermarkets chain in the US and a handful of Amazon fresh stores in the US.
Amazon later confirmed that it will close 68 stores in the US and UK which have been selling books, pop-ups and toys and home goods.
Amazon wouldn’t see how many jobs will be lost in the closures of the stores which started with a single outlet in Seattle in 2015
It’s actually a grim irony in that the giant – which started as an online bookseller and helped drive established rivals such as Borders in the US and globally.
Smaller chains in Australia and the UK also went or downsized as Amazon then morphed into a giant supermarket online and then other businesses such as cloud computing, video, advertising services, streaming video music streaming and downloads.
An Amazon spokesperson said the company “remains committed” to building long-term physical retail concepts and technologies, such as the recently introduced Style stores (physical clothing stores).
The company also said that it would continue to focus on its Amazon Fresh and Whole Foods Market grocery chains, Amazon Go convenience stores, and to embrace the Just Walk Out cashierless technology.
WholeFoods hasn’t set the world on fire under Amazon’s control – Whole Foods and the Fresh outlets reported sales in 2021 were lower than in 2018. Online ordering couldn’t replace the loss of physical sales from actual customers during the two years of pandemics and social distancing rules.
Amazon has also introduced other experimental retail technologies like Amazon One, which lets users scan the palm of their hands to pay for items, and Dash Carts, a shopping cart filled with sensors that lets shoppers check out without a cashier.
In more than six years of experimenting, Amazon has tried out a long list of ideas: convenience stores without cashiers, supermarkets, and a format called “4-star” in which it sells toys, household items and other goods with high customer ratings.
Michael Pachter, an analyst at Wedbush Securities, told Reuters that Amazon was right to forgo the niche market of brick-and-mortar book shoppers, as bad a match as electric car maker Tesla Inc opening gas stations.
Pachter said Andy Jassy, Amazon’s CEO, likely made this call as he reviewed the retailer’s myriad businesses since taking the top job in July. “Retail is hard, and they’re discovering that,” he said.
The departure last November of Amazon’s vice president of physical retail, Cameron Janes should have been a heads up about the troubles in the small business.
Amazon’s music and e-book downloads have fallen – music because of the rise of streaming audio services such as Spotify and e-books because many readers have returned to print editions (as buyers of music have returned in small numbers of vinyl instead of CDs).
For example, e-book sales were reported to have fallen 16% last July. That was after a near 20% slide in June and as opposed to a rise in sales a year earlier in the first round of Covid pandemic-driven lockdowns.
