Amazon closes bookstores and other stores as grocery chain expands

Amazon said it will focus more on its grocery marketplaces and a department store concept in the future.

After opening its first bookstore in Seattle in 2015, Amazon experimented with a range of retail ideas: convenience stores without cashiers, supermarkets and a so-called “4-star” format in which it sells toys, household items and other goods with high customer ratings.

Amazon aimed to reach shoppers in more places and bring its online touch to the real world. Its bookstores would pull from its vast wealth of data and showcase what people were reading, even the reviews they left on Amazon’s website.

But the company’s innovations were not enough to counter the march towards online shopping that Amazon itself had unleashed. Its revenue from “physical stores” – just 3% of Amazon’s $137 billion in sales last quarter, largely reflecting consumer spending at its subsidiary Whole Foods – has often failed to keep pace with growth of the retailer’s other activities.

Michael Pachter, an analyst at Wedbush Securities, said internet-savvy Amazon was right to forego the niche market of physical book buyers, as bad a match as electric car maker Tesla Inc opening gas stations.

Pachter said Andy Jassy, ​​Amazon’s new chief executive, likely made the call as he reviewed the retailer’s myriad businesses since taking office in July. “Retail is tough, and they’re finding out,” he said.

The company’s vice president of physical retail, Cameron Janes, left Amazon after 14 years in November, he said in a LinkedIn post. Now commercial director of retailer REI, he did not immediately return a request for comment.

Amazon will close its 4-star stores, pop-ups and bookstores on various dates and notify customers through signage. Workers will receive severance pay or may receive help finding jobs at any nearby company store, such as more than a dozen Amazon Fresh grocery stores it announced, said the retailer.

Amazon declined to specify how many jobs would be cut.

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