Rumors Swirl About Amazon’s Brick-and-Mortar Growth

Amazon’s plans to open new physical bookstore locations throughout the United States are “modest,” according to the New York Times, despite earlier media reports that Amazon was looking to open up to 400 bricks-and-mortar storefronts.

On Tuesday, February 2, the Wall Street Journal reported that Sandeep Mathrani, chief executive of General Growth Properties Inc., a mall operator, said on an earnings call, “You’ve got Amazon opening brick-and-mortar bookstores and their goal is to open, as I understand, 300 to 400.” Mathrani’s comments were quickly picked up by other media outlets around the country.

While a spokesman for Amazon declined to comment, the Times reported that a person briefed on the matter who was speaking on the condition of anonymity said, “The company’s plans for physical stores are modest … especially in comparison with reports of an expansion suggested by an unusual source, the chief of a large shopping mall operator.”

In November, Amazon opened its first physical bookstore location in Seattle’s University Village mall. In addition to selling Amazon’s electronic devices, Amazon Books showcases the top titles featured on Amazon.com, which sell for the same prices as found online.

At last week’s Winter Institute in Denver, Civic Economics and the American Booksellers Association released a groundbreaking new study, “Amazon and Empty Storefronts,” which details the overall negative impact that Amazon has had on Main Street retailers and jobs, and the communities in which they are located, across the country. The study found that in 2014 Amazon sold $44.1 billion worth of retail goods nationwide, and that this growth and retail displacement resulted in a total of more than $1 billion in revenue lost to state and local governments. The study also estimates that the shift to online sales has resulted in a national reduction in demand for retail space totaling over 100 million square feet, the equivalent of more than 30,000 traditional storefronts employing 136,000 workers.

The complete study is available here.