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Amazon will close its grocery fulfillment center in San Francisco

Amazon come true

Amazon’s same-day fulfillment centers can be leveraged to meet customer needs.

Amazon plans to cease operations of its 38,500-square-foot grocery distribution center in Dogpatch in San Francisco as reported by the San Francisco Chronicle on June 27. By closing one facility, the e-commerce giant plans to do just that will build a 650,000-square-foot logistics center in San Francisco’s Showplace Square neighborhood that is being reviewed by city planners.

The move will affect 85 employees, according to a WARN notice issued by the California Employment Development Department. An Amazon representative confirmed that all of these employees will be offered other job opportunities with the company and that it will continue to fulfill customer orders from other existing locations.

“We are always assessing our network to ensure it meets our business needs and improves the experience for our employees, customers, partners and drivers. As part of this effort, we may close older facilities, improve existing facilities or open new ones, and we consider a variety of factors when deciding where to develop future locations or maintain a presence,” a representative said in a statement to the San Francisco Chronicle. “In this case, we are offering employees at our San Francisco fulfillment center transfers to other nearby facilities or support if they choose not to remain with Amazon.”

In his last letter to shareholders, Amazon chairman and CEO Andy Jassy discussed several aspects of the grocery retail giant’s business strategy. Among its opportunities, Jassy noted that Amazon could leverage more than 50 same-day fulfillment locations within its stores that support top SKUs to provide customers with a better grocery shopping experience. While Amazon works to improve its Amazon Fresh stores and boost organic grocery sales with Whole Foods, same-day retail locations also have huge potential, he said. “What if we leveraged our same-day ordering capabilities to allow customers to easily add milk, eggs, or other perishable items to any Amazon order and receive them the same day? This could change the way people think about dividing their weekly grocery shopping and make shopping for perishables as convenient as shopping for non-perishables,” the CEO wrote.

(RELATED: Jassy remains optimistic about Amazon Grocery)

Amazon reported it profits for the first quarter last week. Net sales increased 13% to $143.3 billion compared to $127.4 billion in the first quarter of 2023 – excluding the unfavorable impact of year-over-year foreign exchange rate changes for the full quarter of $0.2 billion. Sales in the North America segment increased 12% year over year to $86.3 billion.

Operating income increased to $15.3 billion in the first quarter compared to $4.8 billion in the first quarter of 2023. The North America segment’s operating income was an impressive $5.0 billion, up from $0.9 billion last year.

Net income rose to $10.4 billion, or 98 cents per diluted share, from $3.2 billion, or 31 cents per diluted share, last year.

Based in Seattle Amazon is ranked No. 2 on Progressive Grocer’s 2023 PG 100 list. leading food and supplies retailers in North America. PG also included this company on its list Sellers of the century.