Amazon, the e-commerce giant that acquired Whole Foods Market in 2017 for $13.7 billion, has announced the closure of six Whole Foods stores across four states in the United States. The affected locations are in Montgomery and Mobile, Alabama; Brookline, Massachusetts; Tarzana, California; and two stores in Chicago, Illinois.
A Whole Foods spokesperson stated, “As we continue to position Whole Foods Market for long-term success, we regularly evaluate the performance and growth potential of each of our stores, and we have made the difficult decision to close six stores.” Five of the six stores are scheduled to close on May 6, while the closure date for the second Chicago location has not been specified.
The decision to close these stores comes as Amazon continues to refine its brick-and-mortar strategy, particularly in the grocery sector. Despite the acquisition of Whole Foods, the chain only accounts for 2.4% of the US grocery market. In recent years, Amazon has also focused on expanding its own grocery brands, such as Amazon Go and Amazon Fresh.
In March, Amazon announced the closure of 68 physical stores, including Amazon Books, Amazon 4-Star, and Amazon Pop Up stores in the US and UK. This move was part of a plan to concentrate on the grocery business, as the company told Insider at the time.
According to RJ Hottovy, head of analytical research at Placer.ai, Amazon is at an “inflection point” in terms of its brick-and-mortar strategy. The company now has the opportunity to refine its approach and determine the future relationship between Whole Foods and Amazon Fresh.
Recently, Amazon introduced its “Just Walk Out” technology to a Whole Foods store in Washington, DC. This technology, which is already used in Amazon Fresh stores, allows customers to skip the cash register and leave with their groceries, which are then charged to their Amazon account.
Celia Van Wickel, senior director of digital commerce at Kantar, previously told Insider that the changes at Whole Foods demonstrate Amazon’s ongoing evaluation of its Whole Foods strategy as it aligns with other stores and online business.
The closure of these six Whole Foods locations is unlikely to have a significant impact on Amazon’s overall grocery strategy, given the relatively small number of stores affected. However, it does underscore the company’s willingness to make adjustments to its brick-and-mortar presence as it continues to evaluate the performance and potential of its physical stores.
As Amazon continues to shape its grocery strategy, it will be important to monitor how the company balances its focus on Whole Foods with the growth of its other grocery brands and the integration of new technologies. The evolving landscape of the grocery industry and shifting consumer preferences will likely play a significant role in determining the success of Amazon’s approach in the years to come.
