Amazon Overhauls Grocery Strategy: Fresh and Go Stores to Close as Focus Shifts to Whole Foods and E-Commerce Expansion

Amazon.com Inc. has officially announced a sweeping strategic overhaul of its physical retail footprint, marking the end of its Amazon Fresh and Amazon Go grocery store experiments. This major shift in direction was unveiled on Tuesday, January 27, 2026, as the company acknowledged that these specific brick-and-mortar formats had struggled to establish a distinct enough value proposition for shoppers. Furthermore, the economic models underpinning these stores proved insufficient to support the kind of aggressive, large-scale expansion the tech giant typically pursues, leading to this decisive change in course.

According to the company's timeline, most of the 57 Amazon Fresh supermarkets and 15 Amazon Go convenience stores will shut their doors by Sunday, February 1, 2026. However, locations within California have been granted an extended operational window before they too are phased out. This withdrawal follows a pattern of Amazon consolidating its physical retail efforts, having previously shuttered its Amazon Books locations, 4-Star stores, and various pop-up electronics kiosks. By exiting these underperforming sectors, the corporation plans to funnel its resources into more profitable avenues, particularly its high-growth online grocery services and the continued expansion of the Whole Foods Market ecosystem. Notably, a selection of the closing Fresh and Go properties will be repurposed and rebranded as new Whole Foods Market locations.

The 2017 acquisition of Whole Foods Market, valued at approximately $13.5 billion to $13.7 billion, has proven to be a pivotal investment that now serves as the primary pillar of Amazon’s grocery strategy. Since joining the Amazon portfolio, the high-end grocery chain has witnessed a remarkable sales increase of over 40%, signaling strong consumer demand for its premium offerings. To build on this momentum, Amazon has outlined ambitious growth plans that include opening more than 100 new Whole Foods Market stores over the next few years. Furthermore, the company is preparing to launch five additional Whole Foods Market Daily Shop locations—a smaller, more urban-focused format—by the end of 2026.

Despite the closure of the physical storefronts that showcased it, Amazon’s sophisticated Just Walk Out technology remains a vital component of its long-term business model. This contactless payment system, which allows customers to bypass traditional checkout lines, will now be marketed primarily as a standalone licensed product for other retailers. The technology has already gained significant traction, currently operating in more than 360 third-party venues globally, including airports and sports stadiums. By separating this technological innovation from its own retail operations, Amazon hopes to maximize the software's commercial potential across the broader global marketplace.

This massive restructuring is not without a significant human cost, as thousands of hourly staff members across the Fresh and Go networks will see their positions eliminated. These layoffs contribute to a larger trend of workforce reductions at the company; Amazon previously cut 14,000 corporate roles in late October of last year and announced a further reduction of approximately 16,000 positions in January 2026. In response to the impact on its workforce, Amazon has stated that it will offer support to affected employees by helping them identify alternative roles within the company's vast logistics and corporate network or by providing comprehensive severance packages.

While scaling back its physical presence, Amazon is simultaneously accelerating its dominance in the digital grocery space, where it already stands as one of the top three providers in the United States. With annual gross sales in this sector exceeding $150 billion, the company’s e-commerce engine remains a formidable force. Its same-day delivery service for fresh and perishable items has seen an extraordinary 40-fold increase in volume since January 2025, now reaching customers in over 5,000 cities and towns across the country. Looking toward the future, the company is also developing a massive 229,000-square-foot supercenter facility near Chicago. Set to open in late 2026, this innovative hub will merge a traditional fresh grocery experience with a massive inventory of general merchandise, representing the next evolution of Amazon’s retail vision.