Amazon is closing its brick-and-mortar Amazon Go and Amazon Fresh stores. The company announced this shift on Tuesday, stating it will instead focus on expanding its same-day grocery delivery capacity and its Whole Foods Market footprint.
These stores were instrumental in developing Amazon’s cashierless Just Walk Out technology. This system tracks the items customers pick up, allowing them to pay without a traditional checkout process. Amazon will now focus on offering that technology to third-party retailers, such as concession stands in sports stadiums.
In a blog post, the company explained that while it saw positive signs in its Amazon-branded grocery stores, it had not created a distinctive enough customer experience with the right economic model for large-scale growth. The closures will not affect customers who use Amazon for grocery delivery.
This move away from branded retail is not unexpected. Amazon has been reducing its physical retail presence for several years. When closing some stores in 2024, an Amazon spokesperson cited an inability to make the economics work with the existing lease costs.
However, Amazon is not abandoning physical retail entirely. It is pivoting toward the stronger brand affinity people have for Whole Foods Market compared to its Amazon Go convenience stores. The company plans to open more than 100 new Whole Foods stores in the coming years. Since Amazon acquired Whole Foods in 2017, the chain has seen over 40% sales growth and expanded to 550 stores.
Amazon also intends to open more Whole Foods Market Daily Shop locations. These are smaller-format stores emphasizing convenience and grab-and-go meals. This concept seems similar to the idea behind the now-closing Amazon Go and Fresh stores, but likely benefits from the more trusted Whole Foods brand, even though it is under the same corporate umbrella.