The GIANT Company and Giant Food, both part of Ahold Delhaize USA, plan to close six e-commerce fulfillment centers in Pennsylvania and Virginia by the end of the first quarter of 2026. Company leaders announced this decision on December 12. The move will lead to at least 299 job losses and a $50 million non-cash charge for damaged assets. It marks a major change from automated warehouses to picking orders directly from store shelves. This adjustment comes as customer needs evolve, pushing retailers to rethink online grocery operations.
Inside the Hubs’ Final Days
The centers closing include sites in Philadelphia, Lancaster, Willow Grove, Coopersburg, North Coventry, and Manassas. These facilities focused on filling large volumes of online grocery orders. Shutdowns will happen quickly: the Manassas hub closes on February 10, Philadelphia on February 13, Willow Grove, Coopersburg, and North Coventry by March 31, and Lancaster by the end of April.
Now, store staff will pick online orders while handling their usual tasks. This change tackles problems with speed and product options that the centralized hubs could not solve well.
Philadelphia’s Automation Flagship Falls
The Philadelphia center, which opened in November 2021, covered 124,000 square feet and represented GIANT’s push into robotics. It used Swisslog and AutoStore systems with nearly 70 robots to manage over 22,000 products. The hub aimed to handle 15,000 delivery orders each week and employed more than 120 people.
Yet it will close after less than five years, cutting 128 jobs there. Across the network, the fixed stock of 20,000 to 30,000 items often failed to meet what shoppers wanted, showing the limits of these investments.
Worker and Community Impacts Mount
Layoffs total 299 confirmed jobs: 128 in Philadelphia, 90 in Manassas, and 81 in Lancaster. The other three sites add more losses, possibly pushing the number to 400 or 500. These warehouse roles paid $40,000 to $50,000 a year and boosted local areas. In Lancaster, for example, GIANT invested $22 million in 2019 as part of development deals.
Ahold Delhaize says affected workers can apply for transfers, but openings vary by location. Shifting to store picking might mean lower pay of $18 to $22 per hour, plus extra duties for staff.
Reasons Behind the Strategic Retreat
Ahold Delhaize points to customers wanting deliveries in 30 minutes to one hour, along with more product choices. Hubs sat too far from shoppers to deliver that speed. Stores offer 40,000 to 50,000 items each, far more than the robot-friendly stocks at hubs. Ken Fenyo, a former Kroger leader, highlighted low order volumes and long delivery distances as key flaws.
A new company platform, launched across five brands by November 2025, gives real-time views of inventory in over 2,000 stores. This makes store-based picking easier to scale. The $50 million charge breaks down to $35 million for Pennsylvania sites and $15 million for Virginia, covering equipment, upgrades, and software write-offs.
Industry Echoes and Future Shifts
GIANT’s choice echoes Kroger’s actions in November, when it shut nine centers, paid Ocado $350 million in fees, and took a $2.6 billion loss. Kroger now focuses on stores to save $400 million a year. U.S. shoppers prefer same-day orders and smaller baskets, unlike the scheduled slots in U.K. models like Ocado’s. Third-party services step in: Instacart holds 17.2% of e-grocery orders with 258 million annually, while DoorDash grows through GIANT partnerships.
A legal review under the WARN Act by Strauss Borrelli checks if Philadelphia workers got proper notice, which could lead to back-pay demands. Customers benefit from faster access to full store stocks, though app fees apply.
Grocery e-commerce now eyes hybrid setups that mix store closeness, outside partners, and smart automation. Closing hubs saves on leases and upkeep, which may cover third-party costs. Still, 83% of U.S. grocers report poor profits here, with over half facing slim or negative margins per order. For workers, towns, and companies, the path forward depends on blending quick service, wide selection, and costs that last—without big mistakes from the past.
Sources
GIANT and Giant Food to Close 6 Centralized E-commerce Fulfillment Centers. Ahold Delhaize USA, December 18, 2025
Kroger Acknowledges Bet on Robotics Went Too Far. Supply Chain Dive, November 18, 2025
Kroger Cancels Charlotte CFC, Closing Nashville Spoke. Grocery Dive, November 2025
The GIANT Company WARN Act Investigation. Strauss Borrelli PLLC, December 17, 2025
Grocery E-Commerce Isn’t Failing—Centralized Fulfillment Is. Food Trade News, December 22, 2025