Two months after achieving its £10.7bn takeover of the upmarket grocery chain, Amazon is closing down two Whole Foods shops in the United Kingdom.
The company is shutting down its stores in Giffnock, East Renfrewshire and Cheltenham, Gloucestershire meaning that there will be only seven shops remaining in the United Kingdom, all of which are located in London.
Sources from the Industry stated that the decision to close down the stores made sense as neither shop could be serviced by the online grocery service of Amazon. Amazon Fresh has only lately been expanded from London to include Bedfordshire and Hertfordshire.
“It makes perfect sense for Whole Foods to close both stores from a business standpoint, the logistics must be nonsensical,” Steve Dresser from Grocery Insight remarked.
“I think it marks the new age from Amazon where the balance sheet is scrutinised and sacred cows in Gloucester and Scotland aren’t permissible just to ‘spread the brand.'”
In contrast to the United States – where the 440 shops of Whole Foods help to improve the grocery distribution network of Amazon– in the United Kingdom, Amazon is mainly using its acquisition of Whole Foods to expand the range of groceries that are available on its Prime Now and Amazon Fresh services by including items such as crostini, fillet steak, and organic baba ganoush.
It has also tried to broaden the appeal of Whole Foods by reducing prices on some staple goods, including apples, in order to become more competitive. However, the overwhelming majority of the goods of Whole Foods are still much more costly than its rival supermarkets.
“A decision on the future of the stores will be made after the company has consulted with team members to discuss the proposal,” a company spokesperson said. “In the event that the decision is taken to close the stores, we will work with team members to explore alternative employment opportunities.”
Currently, around 150 people are employed at the two Whole Foods shops.