Amazon shuts 4 Fresh stores in Southern California after UK closures

Amazon is closing four more Fresh supermarkets in Southern California as the e-commerce giant continues to focus its grocery strategy around Whole Foods and delivery.

The closures will take place in the coming weeks, Amazon confirmed to CNBC. They follow the shuttering of four other U.S. locations in recent months, in Washington, Virginia, New York and a Los Angeles suburb.

“Certain locations work better than others, and after an assessment, we’ve made the decision to close these Amazon Fresh locations,” Amazon spokesperson Griffin Buch said in a statement. “We’re working closely with affected employees to help them find new roles within Amazon wherever possible.”

At one Fresh supermarket in La Verne, California, employees were told to gather for an all-hands meeting on Wednesday, according to an internal message viewed by CNBC. They learned at the meeting that the store would close in mid-November, and that employees would receive a severance package, according to a person familiar with the matter who asked not to be named because the details were confidential.

The other three stores that are closing are in cities of Mission Viejo, La Habra and Whittier.

Last week, Amazon said it intends to close 14 Fresh grocery stores in the U.K. and convert its five other locations there into Whole Foods markets.

Amazon said it regularly evaluates its store portfolio, which can lead to opening, reopening, relocating or closing certain locations. In the U.S., the company has more than 60 remaining Fresh stores. Last year, the company removed its “Just Walk Out” cashierless technology from the stores. It’s also been culling its footprint of Go cashierless convenience stores.

Amazon has been determined to become a major grocery player for nearly two decades. The company launched Amazon Fresh in 2007, then a pilot project for fresh food delivery, before acquiring upscale chain Whole Foods for $13.7 billion in 2017, its biggest purchase on record.

Amazon debuted its Fresh grocery chain in 2020, with an eye toward mass-market shoppers. The rollout has been turbulent since its early days.

The company opened a flurry of Fresh locations by 2022, but the expansion plans ran into CEO Andy Jassy’s widespread cost-cutting efforts as the company reckoned with the impact of rising interest rates and soaring inflation. In 2023, Amazon announced it would shut some Fresh stores and halt further openings temporarily as it evaluated how to make the chain stand out for shoppers.

While it’s closing Fresh stores, Amazon continues to “innovate and invest in making grocery shopping easier, faster, and more affordable,” Buch said. The company still maintains 500 Whole Foods locations and has opened mini “daily shop” Whole Foods stores in New York City.

Buch said that Amazon serves 150 million U.S. customers with millions of “grocery and everyday essentials available for online delivery, pick-up, or in store shopping.”

On Wednesday, Amazon also launched a new “price-conscious” grocery brand that will be offered online and in its physical stores. And last month, Amazon expanded same-day delivery of fresh foods to more pockets of the U.S.

Jassy and other company executives have touted the success of sales of “everyday essentials” within its online grocery business, which refers to items such as canned goods, paper towels, dish soap and snacks. Jassy told investors at the company’s annual shareholder meeting in May that he remains “bullish” on grocery, calling it a “significant business” for Amazon.

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