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ARCHIVED - Amazon pauses expansion in Spain as bottom falls out of online shopping market
The logistics giant will halt the expansion of its warehouses in Spain until at least 2024
Amid high economic uncertainty and continuously rising inflation rates, online sales giant Amazon has made the call to suspend the construction of any new logistics warehouses in Spain until 2024, giving an ominous ‘wait and see’ order to its local teams.
The growth of the online sales market during the pandemic catapulted Amazon to the top spot in logistics in the world, but a shift in consumer behaviour led to Jeff Bezos’s company reporting its first quarterly losses in seven years this May.
As a result, work will cease on the warehouses currently being built in Reus (Tarragona), Girona, Vitoria and Seville, Murcia, Zaragoza, Vitoria, San Sebastián and Asturias, leaving around 150,000 square metres of land in Spain sitting idle.
Despite the bombshell announcement, Amazon has reaffirmed its commitment to Spain, promising to “continue on the path to fulfil our promise of having 25,000 permanent employees in the country by 2025. We will end 2022 with more than 20,000 permanent employees, after creating 2,000 jobs this year.”
“In 2022, we have opened new logistics stations, Amazon Fresh hubs and a logistics centre (in Spain),” the company said in a statement.
Most recently, the retailer launched a 130,000 square metre storage and management facility in Onda in July.
Despite the multinational's commitment, the current economic situation in Spain does not bode well. Increasing inflation has put Amazon’s low-margin model in jeopardy, a situation which may force it to raise prices to avoid suffering huge losses. The other side of this same coin is that price increases will almost certainly put off prospective shoppers, who are already suffering from inflated costs across the board.
Image: Archive
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