Amazon to close 8 ‘Go’ branches, including in Flatiron District

Andrew Kogan Inc. will close eight branches of its “Amazon Go” stores in the United States, including one location near Baruch College.

Following its announcement of the closures on March 3, the company’s grocery expansion will take a nationwide retreat as a result of cost-cutting measures in lieu of economic uncertainty that has impacted businesses in the technology sector.

“Like any physical retailer, we periodically assess our portfolio of stores and make optimization decisions along the way,” Amazon said in a statement, as reported by GeekWire. “In this case, we’ve decided to close a small number of Amazon Go stores in Seattle, New York City and San Francisco.” 

The company announced the suspension of operations in eight of 29 stores across the United States.

The two branches within New York City will close, including one located on Pearl Lane in the Financial District and on Park Avenue South, which is near Baruch College. The stores will continue operating until April 1.

Customers who frequently visited the stores for the innovative “grab-and-go” style of grocery shopping will still be able to choose from eight locations located in Manhattan.

The other six suspensions will impact the West Coast. All four stores in San Francisco closed their doors, while two locations will close in Seattle, the site of Amazon’s first such establishment.

The announcement came about seven years after the first “Amazon Go” location opened in 2016. Since then, the powerful online retailer has broadened their domestic and global presence, opening its doors in Illinois and California. It also opened a store in London. 

Unlike the average supermarket, customers who walk through the store’s turnstiles and shop can simply scan the QR code found in the company’s app on their smartphones. 

Amazon uses facial recognition and cameras to track what items have been taken and automatically adds them to a customer’s digital cart. If a customer puts an item back on the shelf, it will just as promptly be taken off their digital receipt. 

As one walks out of the store, the payment method linked to their Amazon account will be charged. With the absence of registers, Amazon Go locations use cashier-less checkouts to avoid long lines and overcrowding. 

Amazon experienced some frustrating financial results recently. The company sustained a net loss of $2.7 billion in the fourth quarter of the 2022 fiscal year, despite generating $514 billion in revenue the same year.     

Given these losses, an Amazon spokesperson said that these store sacrifices were an “optimization decision,” but the brand remains “committed to the Amazon Go format.”

Going into this year, Amazon CEO Andy Jassy announced in a memo that the company would initiate layoffs on Jan. 18. He said this would affect at least 18,000 workers, many of whom were largely involved in the grocery sector of the company. 

While some long-term costs can be attributed to COVID-19 pandemic, it is not the sole reason for these decisions, as Amazon generated $33.4 billion in profits in its fourth quarter.

In addition to closing stores to cut costs, Amazon suspended operations in two of its stores in Seattle because of crime and drug use in the area. A new “Amazon Go” location on the outskirts of Seattle opened last year.

In response to these significant layoffs, Amazon will cooperate with impacted employees to find them new positions within the company.