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Industry News: Amazon to Close Its Physical Bookstores

On March 2, Amazon announced plans to close its brick-and-mortar bookstores in the United States and Great Britain, including Amazon Books.

The announcement will affect Amazon’s 24 physical bookstores across 13 states—Arizona, California, Colorado, the District of Columbia, Illinois, Maryland, Massachusetts, New Jersey, New York, Oregon, Tennessee, Texas, and Washington, Amazon’s home state.

Tech Crunch reported that Amazon’s decision “follows a couple of years that have made in-person retail more challenging for everyone, as the COVID pandemic sent more consumers online as foot traffic to local stores declined.” It also speculated that the decision might have been in response to increasing demands among Amazon workers. On March 1, Business Insider reported that retail workers at Amazon Fresh grocery stores in Seattle sent Amazon leadership a list of 25 demands, including a $25 an hour starting wage and the right to unionize.

“Shutting down dozens of physical stores immediately after such demands seems to send a chilling message to all Amazon retail workers that the company doesn’t value its physical retail business,” Tech Crunch’s Sarah Perez reported.

However, industry analyst Michael Pachter of Wedbush Securities claimed Amazon’s decision to close down its physical bookstores was wise as the idea that Amazon would “attract brick-and-mortar book shoppers was as bad a match as electric car maker Tesla Inc opening gas stations.”

While Amazon continues to control approximately 50 percent of the American book market and 80 percent of online book sales, the ABA reported a 49 percent growth in the number of independent booksellers, from 1,651 in 2009 to 2,470 in 2018.

Independent bookstores have certainly experienced a decline in revenues over the course of the pandemic. Still, as independent bookstores successfully transform into important community spaces and directly benefit from the proceeds that returns to them, Amazon seems to have recognized that selling books out of brick-and-mortar stores may not be the best strategy for them.