Amazon to close branded stores, focus on Whole Foods expansion

On Tuesday, Amazon announced that it will close its brick-and-mortar Amazon Go and Amazon Fresh stores. The move marks a shift in the company’s physical retail strategy. Instead of operating its own branded convenience and grocery locations, Amazon will expand its capacity for same-day grocery delivery and focus on growing its Whole Foods Market footprint.

The closures also represent a pivot for Amazon’s “Just Walk Out” cashierless checkout technology. The company originally used its Amazon Go and Amazon Fresh locations to develop and scale this system, which tracks the items customers grab so they can pay without a traditional checkout process. Moving forward, Amazon is focusing on offering this technology to third parties, shifting its role from a direct operator of cashierless convenience stores to a technology provider.

The decision to shutter the branded stores follows previous retail contractions, as Amazon has been cutting down on its physical retail presence over the last few years. The company closed some of its physical stores in 2024, with an Amazon spokesperson stating at the time that the company could not make the economics work with the lease costs.

In a blog post announcing the latest closures, the company acknowledged the financial and operational hurdles of its branded retail experiments:

“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,” the company wrote.

Despite these closures, Amazon is not retreating from physical grocery entirely. The company plans to open more than 100 new Whole Foods stores over the next few years, leveraging a brand that has demonstrated stronger consumer affinity. Since Amazon acquired Whole Foods in 2017, the grocery chain has achieved significant growth:

• Over 40% sales growth since the acquisition
• Expansion to a current footprint of 550 stores

The retail closures will not impact customers who use Amazon for grocery delivery services.

Why it matters

Amazon is effectively conceding that its branded physical retail experiments struggled to scale. By shutting down these locations, the company is doubling down on the established Whole Foods brand while shifting to monetize its cashierless checkout technology as a service for third-party businesses.