Giant Food dialing back e-commerce operations

Giant Food is dialing back its e-commerce operations. WTOP News in Chevy Chase, Md., reported that the Ahold Delhaize-owned retailer is planning to fold its fulfillment centers in Hannover, Md., Milford, Del., and Manassas, Va.

The Manassas distribution center closing comes on the heels of its grand opening a few months ago. The 82,000-square-foot facility was the first to provide beer and wine delivery in Virginia and was touted for its advanced picking software and conveyor system that enabled same-day delivery in as little as three hours. 

[Read more: Not your grandmother’s supermarket pharmacy]

Citing a letter circulated to employees, the news station shared that Giant Food will cease its e-comm fulfillment system on or after Oct. 21. In that communication, the retailer noted that it is making the move to optimize efficiencies and meet consumers’ evolving demands.

The closing will impact about 400 employees who work at the fulfilment facilities. Those employees will be given the chance to apply for other positions at Giant Food.

This summer has brought challenges to Giant Food. In July, President Ira Kress reported that theft has grown significantly over the past five years and violence is escalating at an exponential rate. “The last thing I want to do is close stores. But I’ve got to be able to run them safely and profitably,” Kress told the Washington Post at the time.

[Read more: Giant Food taking precautions to stop theft in stores]

On another level, the redirection of Giant Food’s e-comm operation reflects the ongoing shakeout in the omnichannel marketplace. The latest research from Brick Meets Click and Mercatus showed that e-commerce sales in the United States dropped 7% from July 2022 to July 2023, with decreases across delivery, pickup and ship-to-home fulfillment modes. Other retailers and wholesalers/distributors have shut down fulfillment centers, too: Walgreens closed its e-comm distribution center in Edwardsville, Ill., this summer and United Natural Foods, Inc. (UNFI) announced that it ended operations at a site in Logan Township, N.J.

Based in Landover, Md., Giant Food operates 165 supermarkets in Virginia, Maryland, Delaware and the District of Columbia, with approximately 20,000 associates.

This story originally appeared on Progressive Grocer.