Amazon scales back on groceries in the US and UK

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Usually an Amazon story is about bigger, more, growth and expansion but when it comes to its various groceries endeavours in the UK and the US it looks like Amazon is retreating, or at least consolidating, on some past expansion. It’s rather unusual.

So what’s going on? Firstly, In the States reports say that Amazon Fresh is withdrawing from a number of locations. Amazon Fresh customers in parts of New Jersey, Pennsylvania, Delaware, Maryland, New York, Connecticut, Massachusetts, and Virginia and California have been informed that Amazon Fresh will no longer be available in their postcode.

According to reports, an Amazon spokeswoman confirmed that Fresh is ending the service in parts of these states, but made clear the service would remain serving certain areas of big cities such as New York City, Boston and Chicago. It seems fair to presume that Amazon is retrenching the groceries service in zip codes that haven’t proved to be successful or profitable at the moment.

And in the UK, Amazon is shutting two of its branches of Whole Foods. It’s just two months since they completed the £10.7bn takeover of the upmarket US grocery chain. But now they are closing down the stores in Cheltenham, Gloucestershire and Giffnock, East Renfrewshire. That means only 7 UK branches will remain open and they’re all in Lomdon.

The decision to shut the stores makes sense as neither shop can be serve Amazon’s online groceries service at the moment. Amazon Fresh has only recently expanded from London into Hertfordshire and Bedfordshire and hasn’t yet made inroads in the Midlands or Scotland. And when you consider that there are 440 Whole Foods stores in the US, it’s also hardly a retreat from the the brand or commitment groceries in general.

It’s perhaps best to consider this is in the light of Amazon’s culture of constant reassessment of what’s working and what’s not. As they learn about food sales, they change course and make amendments. This is just a part of that process.

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