Leases   ·   Retail

Amazon Set to Close All Amazon Fresh, Amazon Go Stores in Major Move

Meanwhile, the e-commerce giant is set to open more than 100 Whole Foods stores over the next few years.

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Amazon is making a major change to its physical footprint in the U.S.

The e-commerce giant announced Tuesday that it will close all of its Amazon Go and Amazon Fresh physical grocery stores in an effort to prioritize online delivery service and expand its popular Whole Foods Market business.

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The closures will affect 57 Amazon Fresh stores and 15 Amazon Go locations, an Amazon spokesperson said. Amazon said it reached the decision to close its branded stores because they failed to deliver a “distinctive customer experience” with long-lasting economic returns.

“While we’ve seen encouraging signals in our Amazon-branded physical grocery stores, we haven’t yet created a truly distinctive customer experience with the right economic model needed for large-scale expansion,” Amazon said in a statement Tuesday.

“After a careful evaluation of the business and how we can best serve customers, we’ve made the difficult decision to close our Amazon Go and Amazon Fresh physical stores,” the company added. “We’re grateful to our team members for their many contributions over the years and are working whenever possible to help them find roles elsewhere in Amazon, including across our vast operations network, as we make this transition.”

Amazon Fresh stores tended to stock raw ingredients, like fresh vegetables or uncooked meats. Amazon Go’s inventory was mostly prepared foods.

Meanwhile, Amazon said it will open more than 100 new Whole Foods stores over the next few years, largely due to the Whole Foods brand’s success among other grocery chains. Since buying Whole Foods for roughly $13.7 billion in 2017, Amazon has reported sales growth of more than 40 percent and an expansion to more than 550 locations, the company said.

Some of the company’s shuttered Amazon Go and Amazon Fresh locations will be converted into new Whole Foods stores, the company said. Amazon will also expand a new format of Whole Foods, called Whole Foods Market Daily Shop, which offers a smaller, curated selection of grab-and-go meals and essentials (similar to Trader Joe’s Pronto). Amazon said it will open five more Whole Foods Market Daily Shop locations by the end of 2026.

Also as part of the announcement, Amazon said it plans to expand its same-day delivery service and its general grocery delivery services, which are currently offered in more than 5,000 cities and towns across the U.S.

Amazon CEO Andy Jassy alluded to a shift in the company’s physical store footprint during a third-quarter earnings call in October, saying the company “continues to experiment with various [store] formats.”

While Amazon executes its plan to prioritize online delivery and expand its Whole Foods business, it’s also eyeing new store concepts, such as a “new supercenter physical retail concept,” the company said Tuesday.

Isabelle Durso can be reached at idurso@commercialobserver.com.