Amazon has announced it will shut down its Amazon Go and Amazon Fresh brick and mortar stores, choosing instead to expand same day grocery delivery and accelerate the growth of its Whole Foods Market chain.
Retail Stores To Shut As Strategy Shifts
Amazon said on Tuesday that it will close its Amazon Go convenience stores and Amazon Fresh grocery locations. The move will not affect customers who rely on Amazon’s grocery delivery services.
The company said the decision reflects a reassessment of how its physical grocery operations fit into its broader retail strategy.
Just Walk Out Technology Moves To Third Parties
Amazon Go and Amazon Fresh stores were used as testing grounds for Amazon’s cashierless Just Walk Out technology, which tracks items as customers pick them up and charges them automatically without a traditional checkout.
Amazon said it will now focus on offering this technology to third party partners, including concession operators at sports stadiums, rather than using it primarily in its own branded stores.
In a blog post, the company said it had not yet achieved the right balance of customer experience and economics to support large scale expansion of its Amazon branded grocery stores.
Continued Pullback From Physical Retail
The closures follow earlier reductions in Amazon’s physical retail footprint. When some locations were shut down in 2024, an Amazon spokesperson said the company was unable to make the economics work due to lease costs.
The latest decision continues that trend of pulling back from Amazon branded stores while maintaining other in person retail formats.
Whole Foods Expansion Plans
Amazon said it will continue investing in physical retail through Whole Foods Market, where it sees stronger customer loyalty. The company plans to open more than 100 new Whole Foods stores over the next few years.
Since Amazon acquired Whole Foods in 2017, the grocery chain has grown to 550 locations and recorded more than 40% sales growth, according to the company.
Smaller Store Formats Remain In Play
Amazon also plans to expand Whole Foods Market Daily Shop locations, a smaller format focused on convenience items and ready to eat meals. While the concept overlaps with ideas behind Amazon Go and Amazon Fresh, the company said the Whole Foods brand resonates more strongly with customers in a physical retail setting.
Featured image credits: Wikimedia Commons
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