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Why Amazon Could Be Closing Some Whole Foods Stores in the UK

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Whole Foods’ only store in Scotland to shut down

Whole Foods Market, the organic foods retailer that US-based (SPY) Amazon (AMZN) acquired recently, is closing some of its UK (EWU) stores, according to a BBC report. Citing Whole Foods, the BBC report noted that the grocer was planning to close two of the nine stores it operates in the UK.

The stores that the Amazon subsidiary has proposed to close are located in Cheltenham, Gloucestershire, and Giffnock, Scotland.

Amazon partners with Booths Supermarkets

A few days after it emerged that Whole Foods was planning to reduce its store footprint in the UK, the Financial Times reported that Amazon had struck a deal designed to expand its grocery offering in the UK.

According to the report, Amazon would distribute Booths Supermarkets’ goods in the southern UK, marking the first time in 170 years that Booths items would be available to consumers (XLK) in this region.

The closing of the two stores could be seen as part of Amazon’s integration of Whole Foods, which it acquired for $13.7 billion (UUP). The company could be taking the operations of the stores being closed online, which could allow it to eliminate some operating costs.

The deal with Booths Supermarkets could support providing UK grocery shoppers with a wider selection on Amazon.com.

Reducing international loss

Considering how Amazon’s international business fared in 3Q17, efforts to cut costs could be in order. Amazon’s international operating loss widened to $936.0 million in 3Q17, compared with a loss of $724.0 million in 2Q17 and a loss of $541.0 million in 3Q16.

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