Amazon puts on hold its expansion plans in Spain

September 20, 2022 by
Frank Calviño

Amazon has decided to delay its planned new logistics warehouse in Spain until, at least, 2024. 

The e-commerce titan was planning to build a new logistic warehouse with a blueprint size of 150,000 square meters. 

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According to Amazon itself, the decision was taken based on two factors: a considerable decrease in consumer demand and the rising inflation in Spain. But the company is also canceling other expansion plans in different European nations like Germany, Poland, and Austria, where multiple logistic centers and new warehouses were put on hold. 

Amazon Post-Covid Growth Effect 

Amazon seems to be suffering from another acute case of the Post-Covid Growth Effect, having expanded significantly during the Covid crisis to cope with the rising online demand, but facing now the high operational costs derived from an expansion without the same sales volume. 

This situation previously hit other online companies from the e-commerce industry like Shopify, which had to layoff 10% of its staff, also due to a massive overgrown during the Covid Crisis, and then the later natural reduction of income due to the rekindling of physical stores activities. 

In Amazon's case, the company had to increase its warehouse network in the last couple of years to deal with the increase in demand during the Covid Crisis, but now this is costing Amazon close to 5.6 billion euros in Q2 this year, of wasted money due to excess capacity, lost productivity and inflation. 
For the time being, Amazon has halted all possible new logistic and warehouse facilities programmed in the cities of Murcia, Zaragoza, Vitoria, San Sebastián, Asturias, Vigo, Seville, Girona, and Reus (Tarragona).

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