Amazon is making another major shift in how it approaches grocery retail, and this time the focus is getting tighter.
The company confirmed Tuesday that it will close a large number of its Amazon Fresh and Amazon Go physical stores, redirecting investment toward Whole Foods Market growth and faster grocery delivery. The change reflects Amazon’s continued effort to fine-tune its grocery business, even as the company now generates more than $150 billion in annual revenue.
According to Axios, Amazon said 57 Amazon Fresh locations and 15 Amazon Go stores will shut down, with most closures scheduled for February 1. Locations in California will stay open longer to meet state labor requirements. Some of the closed stores may be converted into Whole Foods Market locations, while Amazon also plans to open additional Whole Foods stores and experiment with smaller-format designs.
The move represents a pullback from years of testing different grocery concepts, including cashierless convenience stores and traditional supermarkets built under Amazon’s own branding. Instead, Amazon appears to be doubling down on what has worked best.
“This brings one of Amazon’s longest-running physical grocery experiments to a close,” said Neil Saunders, managing director at GlobalData. “The blunt truth is that neither Fresh nor Go delivered clear differentiation for shoppers,” Saunders added that Whole Foods has emerged as Amazon’s strongest grocery brand, pointing to clearer economics and stronger customer loyalty.
Amazon acknowledged similar challenges, saying that while it saw “encouraging signals” from its Amazon-branded grocery stores, it did not create “a truly distinctive customer experience with the right economic model needed for large-scale expansion.”
Customers will still be able to order Amazon Fresh online in select areas, as the company accelerates grocery delivery, especially same-day service for perishable items. Amazon also confirmed that its Just Walk Out checkout technology will continue to be licensed to third parties.
