Amazon to Close Grocery Services, Emphasizing Whole Foods
Amazon announced it will discontinue all operations of its grocery services, including Amazon Go and Amazon Fresh, shifting its focus toward Whole Foods Market. The decision was revealed on a Tuesday, with the company indicating plans to transform some existing stores into Whole Foods locations. Currently, Amazon manages 57 Fresh stores and 15 Go stores.
In a blog post, the company noted, “While we’ve seen some positives with Amazon-branded grocery stores, we haven’t yet developed a truly unique customer experience alongside the necessary economic model to achieve widespread success.”
The final operating day for Amazon Fresh and Go will be February 1st.
Amazon also mentioned it is increasing investments in physical stores that appeal to customers. Whole Foods, which Amazon acquired in 2017, has seen a sales increase of over 40%, now boasting more than 550 locations.
The company recognizes that customers are increasingly selecting Whole Foods for both everyday needs and special occasions, as demonstrated by rising foot traffic and growth that outpaces industry averages. To support this expansion, Amazon plans to open more than 100 new Whole Foods stores in the coming years.
Additionally, Amazon hinted at plans to introduce new retail concepts over the next few years, which may feature a supercenter model. This format aims to offer fresh groceries alongside household items and general merchandise.
This change comes shortly after reports indicated that Amazon intends to cut thousands of jobs to streamline its workforce—nearly 10% of its overall employee count. Following the layoff of about 14,000 white-collar positions last October, another round of job reductions is anticipated, potentially impacting a similar number, with a total target of around 30,000 employees, although these figures might fluctuate.
Should these layoffs proceed as indicated, they could mark the largest in Amazon’s history, surpassing the approximately 27,000 job eliminations from 2022.
Amazon’s CEO, Andy Jassy, had mentioned in the previous year that the number of retail corporate employees might decline due to efficiency improvements driven by AI.
