Online mega-retailer Amazon once again is retooling its plan to disrupt the brick-and-mortar grocery industry with the announcement Tuesday that it will close all of its Amazon Fresh grocery stores and Amazon Go convenience stores.
The online retail giant has spent the better part of a decade experimenting with the brick-and-mortar format, beginning with the purchase of Whole Foods Market in 2017.
Amazon currently operates 58 Amazon Fresh stores, 16 Amazon Go stores and 529 Whole Foods Market locations across the US, according to ScrapeHero.com.
The Seattle, Wash.-based company said it plans to convert some of the shuttered Amazon Fresh and Amazon Go stores to Whole Foods but did not specify the number or the timeline.
The company said it plans to open more than 100 new Whole Foods Markets over the next few years.
The announcement comes a few months after Amazon announced plans to close 19 UK Amazon Fresh locations. The company opened its first Amazon Fresh store in the UK in 2021.
Five of the 19 shuttered UK locations were slated for conversion to Whole Foods Market stores, according to the BBC.
“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 Tuesday.
Amazon’s decade of experimentation
Amazon has been trying to disrupt the brick-and-mortar grocery industry for nearly a decade, and the effort has come with more losses than wins.
It first became public that Amazon aimed to purchase Whole Foods in April 2017, and later that year completed the transaction for an estimated $13.7 billion.
Over the next three years, Amazon launched the Amazon Go (2018) and Amazon Fresh (2020) banners.
The experimentation continued with the 2018 launch of Amazon’s Just Walk Out technology, which used cameras, weight sensors and AI technology, enabling shoppers to bypass the checkout and have the bill charged directly to a credit or debit card.
Amazon discontinued Just Walk Out tech at its US Amazon Fresh locations in April 2024, announcing plans to instead focus on its AI-powered shopping carts, known as Dash Carts.
“We’ve invested a lot of time redesigning a number of our Amazon Fresh stores over the last year, offering a better overall shopping experience with more value, convenience and selection – and so far we’ve seen positive results, with higher customer shopping satisfaction scores and increased purchasing,” Amazon spokeswoman Jessica Martin said in a statement. “We’ve also heard from customers that while they enjoyed the benefit of skipping the checkout line with Just Walk Out, they also wanted the ability to easily find nearby products and deals, view their receipt as they shop and know how much money they saved while shopping throughout the store.”
Zombie Amazon Fresh
The decision to shut down the Just Walk Out program came as Amazon faced increasing pressure for failing to open dozens of new Amazon Fresh locations across the US.
Several of the Amazon Fresh locations that never opened ended up in court due to the retailer’s failure to fulfill lease obligations for the properties.
Just when it appeared that Amazon had abandoned its brick-and-mortar banner, the company began remodeling Amazon Fresh locations in Illinois and California. Those revamped stores featured a range of design elements that pulled from the Whole Foods playbook.
The experimentation continued in October 2024 with the launch of Amazon Grocery in downtown Chicago. The 3,800-square-foot test store, which carries name-brand products, is downstairs from a Whole Foods Market located in a high-rise building.
Amazon did not specify its plans for Amazon Grocery, but noted in the press release on Tuesday that the company is not giving up on brick-and-mortar grocery.
“We will continue to invent for customers, including testing new physical store experiences like Amazon Grocery, which we launched alongside Whole Foods Market in Chicago, Ill., or our ‘store within a store’ experience in the Whole Foods Market in Plymouth Meeting, Penn., where customers can also shop for groceries and household essentials from Amazon,” Amazon said.
What’s next for Amazon grocery dreams?
The retailer also began experimenting with Whole Foods Market in 2024, opening a handful of small-format locations in New York City. Known as Whole Foods Daily Market, the smaller stores range in size from 7,000 to 14,000 square feet.
“At our new store formats, we’re tailoring every square foot to the unique, fast-paced needs of urban lifestyles,” said Christina Minardi, executive vice president growth and development, at Whole Foods Market and Amazon. “Expanding our footprint with Whole Foods Market Daily Shop is key to our growth, fostering deeper customer connections and advancing our purpose to nourish people and the planet.”
Whole Foods has opened five Daily Shop locations and plans to open five more in 2026.
Amazon said it also is experimenting with a supercenter-style retail store concept “designed for customers to conveniently shop Amazon’s broad selection and low prices across fresh groceries, household essentials and general merchandise.”
That’s in reference to the company’s plan for a 230,000 big-box Amazon store in the Chicago suburb of Orland Park.
The Village of Orland Park released a statement on Jan. 20, noting that the massive retail store slated to open in 2027 is expected to employ around 500 people.