In a significant strategic shift, Amazon has confirmed the complete closure of its entire network of physical grocery stores across the United States. This decision affects all 72 Amazon Go convenience stores and Amazon Fresh supermarket locations nationwide.
A Strategic Retreat from Physical Grocery Retail
The retail and technology giant stated that it has been unable to develop a "truly distinctive customer experience" that aligns with a viable economic model necessary for large-scale expansion in the brick-and-mortar grocery sector. This admission marks a notable recalibration of Amazon's ambitious foray into physical food retail, which began with the acquisition of Whole Foods Market in 2017 and the subsequent launch of its own branded stores.
Timeline and Compliance with Labour Regulations
The majority of the 72 stores are scheduled to cease operations by February 1, 2026. However, in a move to adhere to stringent state regulations, Amazon Fresh locations in California will remain open for an additional 45 days beyond this date. This extension is specifically to comply with California's labour laws regarding store closures and employee notifications.
Future Focus: Whole Foods and Delivery Networks
Amazon has clarified that its future grocery strategy will now concentrate on two core areas: its established Whole Foods Market chain and its extensive grocery delivery services. The company revealed plans to potentially repurpose some of the soon-to-be-shuttered Amazon Fresh stores into new Whole Foods Market locations, suggesting a consolidation rather than a complete exit from physical spaces.
Support for Affected Employees
The closure will impact a significant number of staff. Amazon has committed to supporting these employees by attempting to find them new roles within its vast network of fulfilment centres and delivery operations. For those who cannot be redeployed, the company is offering severance packages. These packages are reported to include 90 days of full pay and benefits, providing a financial bridge for workers during the transition.
This move underscores the intense competition and thin margins in the grocery industry, even for a powerhouse like Amazon. It represents a pivot back to its strengths in logistics and online retail, while maintaining a physical presence through the Whole Foods brand.
