by Food Trade News Team
This week’s announcement that Giant Food and The GIANT Company will shutter six centralized fulfillment centers in Pennsylvania and Virginia exemplifies a shift happening in many regional and national grocery networks.
Parent company Ahold Delhaize USA reported that it would Close 6 Centralized Fulfillment Centers, expecting to finish by the end of the first quarter 2026. Giant Food will close its e-commerce fulfillment hub in Manassas, VA, and The GIANT Company will close five Pennsylvania locations by early 2026. They are opting to fulfill more online orders from within individual stores and through third-party partners such as Instacart and DoorDash.
The Shift: From Hubs Back to the Store
The closures aren’t an abandonment of digital grocery – online ordering remains a core part of grocery strategy – but rather a recalibration of where and how online orders are assembled and delivered. Operators argue grocery stores offer broader assortment access and faster delivery times in dense metropolitan markets vs separate fulfillment.
The shift underscores how fulfillment is moving out of centralized regional warehouses and back into physical stores. Earlier this year Kroger Companies took a massive $2.6 billion writedown to shut down its Ocado partnership and robotic fulfillment centers. You can read more about Kroger’s failed Ocado Partnership.
Consolidated fulfillment centers were once marketed as a scalable way to serve online customers, Today, infrastructure economics show them to be less cost-effective than store-based operations.
The Food Trade News Editors will argue that it doesn’t mean external distribution hubs are a dead-end forever, but rather that the industry is pausing their use and re-evaluating distribution channels for the foreseeable future.
What This Means for Northeast Grocery
For the Northeast region – where Ahold Delhaize USA operates hundreds of bricks-and-mortar stores across Pennsylvania, New Jersey, Delaware, Maryland, Virginia, and beyond – the operational shift has several implications.
Faster delivery windows and broader product availability through store-based fulfillment may improve consumer satisfaction in dense urban markets, but will raise expectations for delivery speeds and quality.
Giant Food and The GIANT company both offer consumers multiple options for delivery with both in-house and external partners like Instacart, DoorDash & Shipt. These third-party partnerships are increasingly central to grocery delivery strategies across the region as retailers of all sizes scramble to control their e-commerce consumer journey.
Beyond faster delivery windows, the shift back to store-based fulfillment gives grocers greater control over pricing, assortment, and margin discipline. All areas that centralized e-commerce hubs often fragmented.
As Ahold Delhaize USA and Kroger’s recent closures of automated hubs shows, e-commerce will be more closely tied to store operations and customer proximity. Grocery innovation isn’t simply more digital or LLM/agentic assisted transactions. It’s a more efficient, sustainable, and profitable fulfillment model.