Amazon’s Grocery Strategy Pivots as Physical Store Formats Are Overhauled
29.01.2026 - 11:51:05
In a significant strategic shift, Amazon is exiting its brick-and-mortar grocery store ventures, Amazon Fresh and Amazon Go. The company announced the decision via a corporate blog post, framing it as the outcome of a thorough review aimed at optimizing its customer service approach. This move signals a decisive consolidation of its physical grocery ambitions around its Whole Foods Market brand.
The closure of all Amazon Fresh supermarkets and all Amazon Go convenience stores represents a clear prioritization. Amazon's grocery division leadership, in an internal communication, acknowledged that while the formats showed "encouraging signals," they ultimately failed to develop a sufficiently distinct customer experience backed by an economically viable model for large-scale expansion.
Instead, the company's roadmap for its physical grocery presence will now center on Whole Foods. Plans include opening more than 100 new Whole Foods locations in the coming years and expanding the Whole Foods Daily Shop concept, which features smaller stores with a curated product selection. Investments in the Amazon Fresh online delivery service will continue in parallel.
Operational Restructuring and Transition Support
The strategic pivot triggers organizational changes. Amazon is relocating its Grocery Logistics unit into the broader Worldwide Operations division, led by Senior Vice President Udit Madan. Viswanath Subramanian, previously head of Grocery Logistics, is transitioning to a new role within the company.
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Furthermore, John Farrell, the Chief Merchant for the Fresh division who joined Amazon in 2019 from Tesco, announced his departure on LinkedIn. While Amazon did not specify the total number of affected employees, it has outlined a support package for those impacted. This includes 90 days of full pay and benefits, alongside transition assistance.
Several of the soon-to-close locations are slated for conversion into Whole Foods Market stores.
Future Format Exploration and Upcoming Financials
Despite scaling back these specific formats, Amazon continues to experiment with physical retail concepts. The company is developing a new "mass physical store format," with one example being a Big-Box superstore concept in Orland Park, Illinois. This format is intended to offer a combination of groceries, household essentials, and general merchandise.
Investors will get their next official update on the company's performance, including any early effects of this strategic shift, when Amazon releases its Q4 2025 financial results on February 5. A conference call will follow the earnings release.
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