Have you ever walked into an Amazon Fresh store, grabbed what you needed, and breezed out without a single cashier interaction? Or popped into an Amazon Go for a quick snack, feeling like you were living in the future? Those experiences, once heralded as revolutionary, are now coming to an end. Amazon has decided to pull the plug on its physical Amazon Fresh supermarkets and Amazon Go convenience stores, a move that caught many by surprise but perhaps shouldn’t have. In my view, this isn’t a retreat—it’s a recalibration.
The online retail giant has spent years experimenting with brick-and-mortar grocery formats, trying to crack the code on blending technology, convenience, and fresh food. Yet after careful evaluation, the company concluded that these particular setups didn’t deliver the distinctive edge or scalable economics needed to dominate. Instead, Amazon is doubling down on what works: its powerhouse online delivery network and the established appeal of Whole Foods Market.
A Strategic Shift in Amazon’s Grocery Ambitions
This restructuring feels like a pivotal moment in Amazon’s long quest to become a serious player in everyday grocery shopping. For nearly two decades, the company has chipped away at traditional supermarkets’ dominance, starting with basic pantry staples and gradually adding perishables. The physical stores were bold bets, but the numbers and customer habits told a different story. Online grocery ordering, especially with rapid delivery, has exploded, while foot traffic in these experimental formats lagged behind expectations.
According to internal communications, the decision stems from a desire to make more deliberate choices about resource allocation. The leadership isn’t abandoning physical retail altogether—far from it—but redirecting energy toward proven winners. It’s a pragmatic step, and honestly, one that many longtime observers saw coming as same-day delivery kept gaining traction.
What the Internal Memo Really Says
The memo from the executive overseeing worldwide grocery operations strikes a tone of gratitude mixed with resolve. It acknowledges strong performance in 2025, crediting teams for making groceries easier, faster, and more affordable. But it also stresses the need for tough decisions to fuel future growth. Closing the Fresh and Go chains tops the list, with some locations slated for conversion into Whole Foods outlets.
We’ve seen encouraging signals in these formats, but we haven’t yet created a truly distinctive customer experience with the right economic model needed for large-scale expansion.
– Excerpt from leadership communication
That line captures the core issue. The tech was cool—Just Walk Out in Go stores, smart carts in Fresh—but it didn’t translate into the kind of loyalty or margin that justifies massive rollout. Meanwhile, the online side has quietly become a juggernaut, with fresh items dominating bestseller lists in many regions.
Impacted employees receive support, including severance, career transition help, and time to find new roles within Amazon. It’s never easy hearing about layoffs, even when the company emphasizes redeployment. Still, the messaging aims to honor the contributions of those who built and ran these stores.
Restructuring the Grocery Logistics Backbone
Beyond store closures, a significant operational realignment is underway. Grocery logistics teams are moving under the broader worldwide operations umbrella. This shift recognizes the maturity of Amazon’s chill chain capabilities—built since the early days of Fresh delivery—and positions them for greater scale.
By integrating with the massive fulfillment network, automation, and delivery infrastructure already in place, Amazon aims to accelerate perishable expansion. Fresh groceries have surged in popularity within same-day services, often claiming top spots among orders. Merging expertise from specialized grocery teams with general operations feels like a natural evolution.
- Online fulfillment for groceries joins broader operations for efficiency gains.
- Pickup and return functions in Whole Foods align with store operations.
- A new leadership position focused on product and order quality is coming soon.
- Continued collaboration across divisions ensures high standards for freshness and selection.
I’ve always found this kind of integration fascinating. When companies silo functions too long, innovation can stall. Bringing everything closer together could unlock faster rollouts and better consistency—exactly what customers want when ordering food online.
The Rise of Whole Foods and New Store Concepts
Whole Foods remains the cornerstone of Amazon’s physical grocery presence. Acquired back in 2017, it has steadily grown in influence, especially as leadership works to align it more closely with the rest of the grocery ecosystem. Plans call for opening more than 100 new locations over the coming years, plus expanding smaller formats like Daily Shop mini-markets.
Some of these will appear in converted Fresh sites, breathing new life into existing real estate. Beyond that, Amazon is testing innovative ideas: a larger-format store blending groceries, household goods, and general merchandise; “store within a store” setups inside Whole Foods for broader Amazon product access; and neighborhood-focused concepts emphasizing convenience.
What excites me most is the potential for hybrid experiences. Imagine walking into a Whole Foods, picking up organic produce, then ordering a same-day package from Amazon’s vast catalog right there. That kind of seamlessness could redefine how we think about retail.
Why Online Grocery Delivery Is Winning
The real winner in this story is online grocery. Same-day delivery now covers thousands of cities and towns, with plans to reach even more areas soon. Perishables have become some of the hottest categories, proving that convenience trumps novelty for most shoppers when it comes to food.
Amazon claims a spot among the top U.S. grocers by gross sales volume, serving millions of customers annually. That scale didn’t come from physical stores alone—it came from leveraging Prime membership, sophisticated logistics, and relentless focus on speed and price.
- Customers prioritize speed when buying essentials.
- Fresh items perform exceptionally well in rapid delivery windows.
- Digital channels allow broader selection without real estate constraints.
- Prime loyalty drives repeat behavior and higher basket sizes.
- Data from online orders informs better inventory and personalization.
Perhaps the most interesting aspect is how this mirrors broader consumer trends. People want groceries delivered quickly and reliably, without the hassle of parking or crowds. Physical stores still have their place for discovery and immediate needs, but for routine shopping, digital wins hands down.
Historical Context: Amazon’s Long Grocery Journey
Amazon’s grocery story didn’t start yesterday. It began with basic non-perishables shipped in boxes, evolved into dedicated Fresh warehouses for same-day perishables, and then ventured into physical retail. Each phase taught valuable lessons.
The acquisition of Whole Foods marked a turning point, giving Amazon instant credibility in fresh and organic categories. Integrating that brand with Amazon’s tech and logistics took time, but progress is evident. Efforts to unify under a “One Grocery” vision have streamlined operations and improved customer experiences across channels.
Along the way, experiments like Amazon Go showcased cutting-edge tech—computer vision, sensor fusion, machine learning—but scaling proved harder than anticipated. High development costs, maintenance complexity, and competition from traditional convenience chains limited widespread adoption.
Meanwhile, Fresh supermarkets aimed to combine low prices with quality fresh goods, but they faced stiff competition from established players with loyal customer bases and better localized assortments. In hindsight, the physical push may have been necessary to learn what customers truly value.
Impact on Customers and the Broader Market
For everyday shoppers, the changes mean continuity in many ways. The Amazon Fresh brand lives on through online ordering, with fast delivery options intact. Whole Foods locations will grow, offering familiar premium experiences. Same-day service will expand, bringing fresh options to more neighborhoods.
Some customers might miss the in-store convenience of Go for quick grabs or Fresh for browsing produce. But if the data holds, most will adapt happily to doorstep delivery. The private label Amazon Grocery brand, now boasting over a thousand items at competitive prices, should help maintain value perception.
Competitors will watch closely. Traditional grocers have ramped up their own delivery and pickup services, often partnering with third parties. This pivot could intensify pressure on them to innovate further, while giving Amazon more resources to refine its strengths.
Looking Ahead: Opportunities and Challenges
The path forward looks promising, but execution will be key. Integrating logistics teams smoothly, maintaining quality standards across a larger network, and rolling out new formats without hiccups won’t happen overnight. Leadership changes and role transitions add another layer of complexity.
Yet the optimism in internal messaging feels genuine. With billions in grocery sales already, massive customer reach, and a clear focus, Amazon is positioning itself for sustained growth in a massive market. Innovations in automation, AI-driven personalization, and potentially new hybrid retail concepts could surprise us again.
In my experience following retail trends, the companies that thrive long-term are the ones willing to kill underperforming initiatives and reinvest aggressively in winners. This restructuring exemplifies that mindset. Whether it pays off remains to be seen, but the logic is sound.
Change is rarely comfortable, especially when it affects people and long-built projects. But if the goal is delivering better value to customers, this deliberate pivot might just be the right move at the right time. The grocery landscape is evolving rapidly, and Amazon clearly intends to lead rather than follow.
What do you think—will online and Whole Foods dominance be enough, or will we see new physical concepts rise from the ashes? The next few years should tell an interesting story.
