Amazon restructures grocery business, closes all Fresh and Go stores

Amazon has announced the closure of all grocery and retail stores under the names “Amazon Fresh” and “Amazon Go.” This affects 72 stores within the USA. The company is instead focusing on online ordering and delivery for groceries, as well as “Whole Foods Markets,” a supermarket chain with a wide selection of organic products. Some previous Fresh or Go locations will be converted into Whole Foods stores. It is currently unclear how many employees will be impacted by the closures and this restructuring.

Amazon had already bought the world's largest organic chain Whole Foods in 2017 for 13.7 billion US dollars, thus entering the brick-and-mortar grocery business in a big way after previously pushing grocery delivery. These were joined by the smaller grocery stores Amazon Fresh and Amazon Go compared to the organic supermarkets. Here, Amazon also introduced payment without a checkout in the supermarket format, which the company calls “Just Walk Out.” Since 2020, Amazon has also been offering the technology for checkout-free supermarkets to retailers.

End for Amazon Go & Fresh, but Whole Foods & Just-walk-out continue

However, the technology has apparently not paid off for Amazon Go and Amazon Fresh. Although the company speaks of “encouraging signals” for its grocery stores, Amazon writes now, “We haven't yet managed to create a truly distinctive customer experience with the right economic model that's required for large-scale expansion.” This probably doesn't apply to Whole Foods, however, as these supermarkets have seen sales growth of over 40 percent since the acquisition in 2017, according to Amazon, and have been expanded to over 550 locations.

This is not the first cost-saving measure in this business area. Already in 2023, Amazon closed several stores in the USA, which also offered the checkout-free payment function. Nevertheless, Amazon continues to promote the technology. Amazon used Amazon Go as “innovation centers,” where “Just walk out” was developed. Now the technology is used at over 360 third-party locations in five countries. Amazon cites canteens and stadiums as examples, where checkout-free payment has significantly reduced waiting times, for instance, from 25 to 3 minutes in a hospital cafeteria. The technology is also used in the break rooms of more than 40 North American Amazon logistics centers, and further locations are expected to adopt the technology in 2026.

Online groceries in high demand

Customers are now expected to order groceries online instead of visiting Amazon Go or Fresh. The company now offers fresh grocery delivery in more than 5,000 cities in the USA. In addition, customers in 2,300 locations can have groceries delivered on the same day they order. This is to be expanded to more cities later this year, as this delivery service for perishable goods is likely in high demand. According to Amazon, sales in this area have increased 40-fold since January 2025.

Amazon has not disclosed the number of employees affected by the closure of the grocery stores, but Geekwire reports that they are to be offered positions in other areas of the company. The company also offers severance packages to employees who wish to leave, which include 90 days of full salary and all benefits.

(fds)