Amazon is pulling the plug on its Amazon Fresh and Amazon Go grocery store chains, marking a strategic retreat from its bid to build a large-scale, conventional supermarket business. The decision comes roughly five years after Amazon entered the physical grocery market with the opening of its first Amazon Fresh store in Woodland Hills, California, in 2020. Since then, the company has launched dozens of Fresh locations, but the concept has struggled to gain traction with shoppers and compete against established grocery retailers.
In early 2023, Amazon paused expansion of the Fresh chain as it reassessed the model and sought ways to improve performance. Company executives conceded that Amazon had moved too quickly in its push to capture market share. “There are some clear fundamentals that every grocer needs to get right. And we need to improve on that,” Claire Peters, then vice president of retail for Amazon, said during a tour of the Woodland Hills store later in 2023.
Amazon subsequently expanded product assortments, refreshed store layouts, and leaned more heavily on value pricing, while continuing to promote technology-driven features such as its Dash Carts. Despite these efforts, the company acknowledged this week that it failed to turn Amazon Fresh into a sustainable supermarket business. “We haven’t yet created a truly distinctive customer experience with the right economic model needed for large-scale expansion,” Amazon said in its announcement confirming the closures. The move was described by the company as a “difficult decision” and was framed within a broader statement highlighting Amazon’s scale in online grocery. Amazon noted that its grocery delivery service is now available in more than 5,000 communities and that it generates more than $150 billion in gross grocery sales. Customers will still be able to shop Amazon Fresh online for delivery, the company said.
Looking ahead, Amazon plans to concentrate its brick-and-mortar grocery ambitions on Whole Foods Market, with more than 100 new stores expected to open under the banner over the next few years. The company also pointed to early success with Whole Foods’ smaller-format Daily Shop concept and said it plans to open five additional Daily Shop locations by the end of 2026. Industry analysts say the move does not signal Amazon’s exit from grocery retail altogether.