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Amazon.com Inc. is shuttering its Amazon-branded grocery stores and automated grab-and-go markets, citing a lack of a distinctive customer experience and a viable economic model for large-scale expansion. This move signifies a retreat from its physical retail ventures.
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(Bloomberg) -- Amazon.com Inc. is shuttering its Amazon-branded grocery stores and automated grab-and-go markets, eliminating two centerpieces of its push into physical retail.
Amazon Fresh and Amazon Go stores will close, the company said in a blog post on Tuesday, with some locations converted into Whole Foods Market stores.
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“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,” Amazon said.
The moves mark the e-commerce giant’s latest retreat from its brick-and-mortar retail efforts. Since the surprise opening of a physical bookstore in 2015, Amazon has tried and failed to establish a foothold under its own brand in categories from groceries to fashion, often with technology flourishes like digital price tags or novel checkout methods.
Over the last few years, the company has backed away from the bookstores, an eclectic kitchen goods, toys and electronics store called Amazon 4-Star, electronics kiosks in shopping malls and a short-lived clothing storefront.
In the blog post, Amazon said it would continue to invest in groceries sold both online and offline. That includes an ongoing effort to stock more produce and perishables in Amazon’s same-day delivery warehouses and at more Whole Foods locations, which now comprise more than 550 stores.
Amazon currently operates 14 Go stores, which use cameras to track what people grab off the shelves, and 58 Amazon Fresh grocery stores, according to its website. The last day of operation for most of those stores will be Sunday, a spokesperson said, except in California, where they’ll stay open longer to comply with state requirements for advance notice of closures. The company says it will help store employees find other jobs at Amazon.
All told, the Seattle-based company says it’s a top-three grocer in the US, with more than $150 billion in gross sales. Much of that volume is shelf-stable items and consumables. After buying Whole Foods in 2017, Amazon quickly added home delivery from the organic grocer’s stores, but the company has struggled to find the right formula for stocking and delivering perishable goods from its massive network of warehouses.
Sales of perishables for same-day delivery through that network grew by 40 times in the last year, Amazon said.
--With assistance from Spencer Soper and Natalie Lung.
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