After doubling its amount of warehouse space during the first two years of the pandemic, Amazon reportedly seems to be dialing back and rethinking some projects.
In 66 cases this year, the company has either closed existing facilities or canceled the opening of previously planned ones, The Wall Street Journal reported Friday (Sept. 9).
The moves were made as the overall growth in eCommerce leveled off because of consumers returning to shopping in stores, inflation impacting their willingness to spend and the entire economy showing signs of slowing, according to the report.
The facilities that have been closed or canceled have been ones of different sizes serving different roles in the fulfillment process, but Amazon continues to build large distribution facilities, per the report.
Most of the closures of smaller facilities seem to have been done in order to consolidate, while cancellations of larger projects were likely done to preserve capital, MWPVL Founder and President Marc Wulfraat said in the report.
An Amazon spokesperson said, “While we’re closing some of our older sites, we’re also enhancing some of our facilities and we continue to open new sites as well,” according to the report.
In late May, The Wall Street Journal reported that Amazon was retooling its eCommerce operations, meaning that there may be less demand for warehouses and distribution square footage, and subleasing some of its warehouse space.
Read more: eCommerce Refashions Middle and Last Mile, and Real Estate, Too
At the same time, Amazon continues to invest in other aspects of eCommerce order fulfillment — including the technology used inside its warehouses.
Read more: Amazon Acquires Belgian Warehouse Automation Firm Cloostermans
For example, the company reported Friday that it had signed an agreement to acquire Belgium-based Cloostermans, which already supplies Amazon with robotics and technology used to move and package goods, in order to speed the deployments of these sorts of solutions.
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