Amazon will close its Amazon Fresh and Amazon Go stores as it aims to expand its Whole Foods Market grocery business.
The company plans to open more than 100 new Whole Foods locations over the next few years, it said. Amazon acquired Whole Foods in 2017.
“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,” wrote Amazon.
“After a careful evaluation of the business and how we can best serve customers, we've made the difficult decision to close our Amazon Go and Amazon Fresh physical stores, converting various locations into Whole Foods Market stores.”
Whole Foods will also expand its smaller-format Daily Shop locations, with five new stores to open this year.
Amazon Fresh will continue to be available for grocery delivery in certain areas. Amazon is aiming to find employees at Amazon Go and Amazon Fresh stores roles elsewhere in the company, it said.
Amazon will add perishable groceries to its Same-Day Delivery service in new cities and towns this year, having first begun doing so in 2025.
Whole Foods currently operates more than 550 locations, with Amazon saying its sales have grown by over 40% since 2017. Amazon sees more than US$150 billion in gross grocery sales annually, the company said, although it does not report Whole Foods revenue separately in its quarterly earnings.
Amazon previously said in September that it would close its 19 Amazon Fresh stores in the United Kingdom, with five locations being converted to Whole Foods.
Amazon (NASDAQ: AMZN) shares closed 2.6% higher at $244.68, before rising 0.4% after-hours. Its market capitalisation is $2.62 trillion.
