Amazon’s Strategic Shift in Grocery: Closing Fresh and Go Stores, Focusing on Whole Foods

In a significant strategic shift announced Tuesday, Amazon revealed plans to close all 72 of its Amazon Go and Amazon Fresh locations nationwide. This move marks the end of a decade-long experiment with Amazon-branded grocery and convenience stores, with the company now concentrating its grocery efforts on Whole Foods Market and its online delivery services. Most locations will shut down by Sunday, February 1, though California stores will remain open for an additional 45 days due to state labor notification requirements. Despite “encouraging signals,” Amazon acknowledged it couldn’t create “a truly distinctive customer experience with the right economic model needed for large-scale expansion” with these formats.

This decisive pivot doesn’t represent a retreat from the grocery sector but rather a strategic consolidation. Amazon emphasized that it has “gathered valuable insights about what matters to customers” through operating Fresh and Go stores. A limited number of the 57 Amazon Fresh locations may eventually reopen as new Whole Foods stores, while all 15 remaining Amazon Go locations will close permanently. The company didn’t disclose the total number of affected employees but stated it’s working to place workers in other roles, including in its fulfillment and operations network, with 90 days of full pay and benefits offered as part of its severance package. The closures include 11 Seattle-area locations, including the original Go store at Amazon headquarters where the company debuted its innovative “Just Walk Out” technology in 2018.

With these closures, Whole Foods will become Amazon’s only physical store brand in the U.S., culminating a decade after the company began its brick-and-mortar retail journey with its first bookstore in Seattle. Amazon will maintain a hybrid grocery store alongside Whole Foods in Chicago and a “store within a store” format at a Whole Foods in Pennsylvania where customers can shop Amazon products alongside groceries. The company insists it’s still experimenting with concepts in physical retail, suggesting new types of Amazon-branded stores could emerge in the future. In an internal memo, Jason Buechel, the Amazon Worldwide Grocery Stores VP and Whole Foods CEO, told employees who built and ran the Fresh and Go stores that they “pioneered something new” and noted that the Amazon Fresh brand will continue to exist online.

Amazon’s grocery journey began with the launch of its Fresh grocery delivery service in Seattle in 2007, initiating a long push into one of retail’s largest and most challenging categories. Despite grocery’s notoriously thin margins and fierce competition, the potential reward is enormous – Americans spend more than $1 trillion annually on groceries. The company affirmed today that it now ranks among the top three grocers in the U.S., with more than $150 billion in gross sales and 150 million customers shopping for groceries each year. Whole Foods has seen remarkable growth since Amazon’s 2017 acquisition, with sales increasing by more than 40%. The company now plans to open over 100 additional Whole Foods locations in the coming years and expand its smaller Whole Foods Daily Shop format from five to 10 locations by the end of 2026.

While closing its branded grocery stores, Amazon is doubling down on other promising avenues in the grocery sector. The company recently received approval to build a massive 230,000-square-foot “supercenter” in Orland Park, Illinois, combining groceries with general merchandise – Amazon’s largest physical retail venture to date, expected to open in 2027. Meanwhile, Amazon’s Same-Day Delivery service for fresh groceries has expanded dramatically, now available in 2,300 U.S. cities and towns. The company reports that perishable grocery sales through this service have grown 40-fold since January 2025, with fresh items now comprising nine of the top 10 most-ordered products where the service is available. The innovative “Just Walk Out” technology originally developed for Amazon Go stores will continue as a licensing business, now operating in more than 360 third-party locations across five countries.

In retrospect, signs of this shift were evident. During Amazon’s October earnings call, CEO Andy Jassy notably avoided directly answering whether Amazon still needed Fresh stores given the traction in online grocery delivery. Instead, he emphasized that same-day delivery of perishable groceries was the format Amazon was most excited about. “We’re on to something very significant with what we’re doing with perishables from our same-day facilities,” Jassy stated during the call. This strategic consolidation has been building for some time – a year ago, Amazon expanded Jason Buechel’s role beyond Whole Foods to oversee its entire worldwide grocery business, including Amazon Go and Amazon Fresh, a move that in hindsight signaled the company’s future direction. This latest decision comes amid a broader reset at Amazon, which is also preparing for another wave of corporate layoffs, as Jassy attributes these changes to a need to streamline operations and reduce bureaucracy after years of rapid expansion.