Amazon's latest pivot: Bye-bye, automated grocery stores
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- Amazon is closing its Amazon Fresh and Amazon Go stores, the company said Tuesday.
- The company has yet to find "a truly distinctive customer experience" to expand, Amazon said.
- Amazon Fresh, which the company built from scratch, opened its first store in 2020.
Amazon is closing the supermarket chain that it spent nearly six years building from scratch.
The tech and retail giant said it plans to close its Amazon Fresh stores "to prioritize investment in growth areas," in a company blog post on Tuesday. Amazon has around 60 Fresh stores in the US listed on its website.
The company is also shuttering about 15 Amazon Go convenience stores, it said.
"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 in the post.
Some of the locations are set to become Whole Foods stores, Amazon said.
The closures are the latest pivot for Amazon's grocery business. Despite creating Amazon Fresh, buying Whole Foods, and building its grocery delivery muscle, Amazon's market share is still a fraction of several rivals.
Walmart has emerged as a particular source of inspiration for Amazon's grocery business lately, Business Insider has reported. The company has plans to build a Walmart Supercenter-like megastore near Chicago, for example.
Amazon has spent the better part of a decade trying to build a grocery store model using its own name that meets its expectations. It opened the first Amazon Go location to the public in 2018 and the first Amazon Fresh store in 2020.
The Fresh stores offered more mass-market groceries, such as some sodas and snacks, than Whole Foods stores did. Amazon also touted the stores for their use of technology, such as the company's Just Walk Out system.
Amazon said Tuesday that Whole Foods and delivery will be the focus of its grocery business in 2026.
The company plans to open over 100 Whole Foods supermarkets "over the next few years," it said in the blog post. Amazon is also opening five new Whole Foods Market Daily Shop stores in 2026, offering a pared-down selection of groceries in smaller stores.
Amazon is also working on expanding its grocery delivery capabilities this year, it said. The company offers delivery in 5,000 cities and towns in the US, including many where customers can get same-day delivery on perishable goods like fresh produce and ice cream.
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