What: Amazon Go is permanently closing eight of its Go convenience stores yet will continue to open new stores despite being in a cost-cutting mode recently.

Why it is important: Closing more than a quarter of its Go stores highlights the ongoing challenges the company has faced in building its physical retail footprint.

The retailer’s decision to close several of its convenience stores follows its opening of a new location just weeks ago, in addition to pausing the rollout of its Fresh grocery stores about month ago.

Despite these setbacks in the physical retail segment, Amazon reported a 6% rise in physical store sales during Q4.

Amazon stated that they remain committed to the Go format and will continue to evolve the stores as they learn which locations and features resonate most with customers.

Amazon to close 8 of its Go stores