The GIANT Company, a major Pennsylvania grocer, plans to shutter five centralized e-commerce fulfillment centers by early 2026, impacting over 200 workers. This move reflects a broader industry pivot amid rising costs and shifting delivery demands.
Store-Based Fulfillment Takes Center Stage
The closures target facilities in Philadelphia, Willow Grove, Coopersburg, North Coventry, and Lancaster. Parent company Ahold Delhaize points to customer demands for quicker delivery and wider product choices as key drivers. Instead of relying on off-site warehouses, the company will shift to store-based picking, where staff gather orders directly from supermarket shelves. This model supports faster delivery windows and allows order changes closer to delivery time compared to the centralized system. Third-party services like Instacart and DoorDash will manage the final delivery leg.
Profitability Pressures Fuel Closures
Centralized operations face profitability challenges, with labor costs representing a significant expense. Facilities far from urban centers also rack up higher transport expenses due to longer routes. Store fulfillment cuts these issues by placing inventory nearer customers, dodging costly warehouse builds and specialized staff.
Industry Echoes Kroger and UNFI Moves
Kroger, the largest U.S. supermarket chain, is closing nine centers—including three Ocado-powered sites—affecting nearly 1,700 employees. This follows a $2.6 billion impairment charge tied to underperforming automation. Facilities in Pleasant Prairie, Wisconsin (opened June 2022); Frederick, Maryland (June 2023); and Groveland, Florida (June 2021) lasted barely 18 months despite heavy investments. Kroger anticipates $400 million in digital profit gains by 2026.
United Natural Foods Inc. (UNFI) will close its Allentown, Pennsylvania, site in fiscal 2026 after losing its Key Food contract, cutting 716 jobs including 172 drivers. UNFI is consolidating volumes into fewer Central U.S. centers for efficiency.
Financial Hits and Digital Resolve
Ahold Delhaize USA forecasts $50 million in non-cash charges: $35 million for The GIANT Company’s Pennsylvania sites and $15 million for Giant Food’s Manassas, Virginia, facility. Even so, leadership views e-commerce as vital for omnichannel expansion. Online sales rose 12.2% at constant rates in Q3 2025.
U.S. online grocery hit $10 billion in July 2025, up 26% year-over-year, reaching 61% household penetration or 81 million people. All methods—delivery, pickup, ship-to-home—grew. Penetration stood at 12.5% in 2024, projected at 13.8% for 2025. Globally, food e-commerce eyes growth from $1.82 trillion in 2025 to $5.3 trillion by 2035, a 11.3% compound annual rate. North America leads innovation.
Pennsylvania’s Warehouse Strain
Beyond groceries, Pennsylvania saw Great Dane close its Elysburg plant (164 jobs) due to weak freight demand; S&S Activewear shutter a York County center (128 jobs); and Snyder of Berlin end potato chip production in February 2026 (96 layoffs). Regional grocers like The GIANT Company, with 193 stores across four states, face giants Walmart and Amazon, whose scale and tech subsidize digital efforts. Store networks offer a counter by enabling localized fulfillment.
Support for Workers and Next Steps
Ahold Delhaize filed WARN notices, meeting 60-day requirements for mass layoffs. Affected staff can seek roles at sister chains like Stop & Shop, Food Lion, and Hannaford. Closed sites, like Lancaster’s 235 N. Reservoir Street (a former store), may revert to retail or distribution.
Food Lion marked 50 straight quarters of sales growth, with digital up nearly 40% in Q1 2025. Ahold Delhaize remodeled 200 of Stop & Shop’s 360 stores and rolled out PRISM tech.
Hybrid models blending store picking with urban automation now dominate thinking. Kroger keeps some Ocado sites and plans AutoFreezer upgrades. Online penetration nears 15% by 2026, ensuring e-commerce’s role despite model shifts—balancing speed, costs, and growth in a competitive landscape.
Sources:
“PA Distribution Facility to Close This Week,” PennLive Business, December 2025.
“Giant Food and The Giant Company to Shutter Centralized E-Commerce Centers,” Grocery Dive, December 17, 2025.
“Giant Company Closing Five Pennsylvania Fulfillment Centers,” Yahoo Finance, December 18, 2025.
“United Natural Foods to Close Pennsylvania Warehouse, Lay Off 716,” BizJournals Philadelphia, June 10, 2025.
“Kroger Cancels Plans for Additional Automated Fulfillment Centers, Closes Nashville Spoke,” Supply Chain Dive, December 9, 2025.
“Job Openings and Labor Turnover — Pennsylvania,” U.S. Bureau of Labor Statistics, August 2025.