US-owned grocery chain Whole Foods Market could be set to close two of its nine stores in the UK.
The retailer, which was recently acquired by online retail giant Amazon, has proposed plans to close its stores in Giffnock, Scotland, and Cheltenham, Gloucestershire.
"A decision on the future of the stores will be made after the company has consulted with team members to discuss the proposal," the company said in a statement.
"In the event that the decision is taken to close the stores, we will work with team members to explore alternative employment opportunities."
These closures would leave Whole Foods with seven remaining stores, which are all located in London.
"We remain committed to the UK market and will continue to look for ways to offer high-quality natural and organics to our customers," the company added.
Scaling Back
Last month, Amazon reported that net sales increased by 34% to $43.7 billion in the third quarter of the year, boosted by its Whole Foods acquisition.
However, the company has also had to review its grocery strategy following the $13.7 billion deal.
Lisa Byfield-Green, senior retail analyst at Lebensmittel Zeitung, said that it is right for Amazon to question the sense in operating these UK stores, as they are located far away from the retailer's central hub in London.
"Continuing to operate these stores makes no sense from a business perspective. Footfall is likely low and the distribution costs of delivering to the stores must be prohibitive, particularly for the single store in Scotland."
"Yet whilst it is closing two underperforming stores, at the same time the company says it remains committed to the UK market," she added.
"It makes far more sense for Whole Foods to continue operating a cluster of stores in London – and potentially other big cities across Europe – whilst at the same time playing to its online strengths."
Elsewhere in its grocery business, Amazon announced last week that it is scaling back its grocery delivery service Amazon Fresh at least seven states in the US.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.
