Whole Foods to Lead Amazon Grocery
Amazon is shutting down its branded brick-and-mortar grocery formats as the company consolidates its physical retail strategy under the Whole Foods Market brand. The move impacts around 70 Amazon Fresh and Amazon Go stores across the United States.
According to an official blog announcement, Amazon said the stores showed “positive signs,” but failed to deliver a distinctive customer experience or the economic model necessary for large-scale expansion. As part of the shift, several locations will be converted into Whole Foods Market stores, and Amazon plans to open 100 new Whole Foods units in the coming years, including its new smaller concept, Whole Foods Market Daily Shop.
Amazon emphasized support for its workforce throughout the transition, stating it is working to place employees into other roles across its large operations network.
The company is also testing new physical retail formats, such as a hybrid “store-within-a-store” model combining Amazon Grocery and Whole Foods in Illinois. In the Chicago suburbs, Amazon is developing a 229,000-square-foot retail space designed to resemble a Walmart-style shopping environment.
Retail analysts point out that Amazon Fresh and Amazon Go struggled to offer compelling differentiation. Neil Saunders, managing director at GlobalData, noted Fresh was “too similar” to traditional competitors, while Go’s cashier-less “Just Walk Out” technology wasn’t a major draw for shoppers.
Despite the closures, experts say Amazon is not failing in the grocery sector. The company continues to expand via private label brands such as Amazon Grocery and Amazon Saver to compete with low-cost retailers like Aldi and Lidl. It also offers same-day fresh delivery in over 2,000 U.S. cities and has integrated grocery partnerships, though these sometimes led to fragmented online checkout experiences.
Today, Amazon’s grocery ecosystem is a $150 billion business with more than 150 million shoppers, allowing it to gain significant market share—even against industry leader Walmart.
