Amazon shutting down physical Amazon Go, Amazon Fresh stores: New Whole Foods outlets on the cards

E-commerce titan Amazon is closing its physical Amazon Go and Amazon Fresh stores, as per an announcement made by the company on Tuesday.

The closure of Amazon's physical stores is to improve Amazon's same-day grocery delivery services and expand its Whole Foods Market presence by redirecting resources.

The company previously utilised these stores to promote its cashierless Just Walk Out technology, which allowed customers to shop without traditional checkout processes and avoid long queues of customers waiting for their turn to pay.

Amazon's official blog post acknowledged the challenges of creating an efficient and unique customer experience and a reliable economic model for a large-scale expansion of its branded grocery stores.

"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 stated.

Despite the shutdowns, the company reassured customers that grocery delivery services would remain functional as usual. The decision to divest from its retail stores is in line with an active trend of reducing physical retail presence.

Why Amazon closing its physical stores?

It comes on the heels of Amazon's recent difficulties in making these stores economically dependable amid rising lease costs.

New Whole Foods locations

Plans to capitalise on the stronger brand loyalty associated with Whole Foods Market are also on Amazon's wish-list, as it has announced the opening of over 100 new Whole Foods outlets in the coming years.

Since its acquisition by Amazon in 2017, Whole Foods has experienced more than 40% sales growth and expanded to 550 stores.

The retail juggernaut will also introduce Whole Foods Market Daily Shop locations. These will be smaller stores primarily focusing on convenience and ready-to-eat meals, ideal for consumers seeking quick, quality options.