Why Is Amazon Fresh Shutting Its Grocery Stores When Its Sales Are Soaring—And What's Really Replacing Them?

The retail landscape witnessed a dramatic reversal on Tuesday as one of the world's most valuable companies admitted its high-tech grocery experiment hasn't gone according to plan. For years, the promise of a cashierless, futuristic shopping experience seemed inevitable, but Amazon has now abruptly shifted gears, leaving behind a trail of unfulfilled site plans and empty shopfronts.

In a move that redefines its physical retail strategy, the e-commerce giant announced on Tuesday, 27 January, that it is shuttering its Amazon Go and Amazon Fresh store brands. This decision comes as the company seeks to optimise its operations and focus heavily on areas where it has seen consistent growth.

Unfinished Interiors And The Abandonment Of High-Tech Retail

The closure announcement affects a significant number of planned locations that never welcomed a single customer. According to an Amazon spokesperson, the company is determining and evaluating stores on a case-by-case basis. Some existing locations will convert to Whole Foods Market stores, while others will cease operations entirely.

This retreat is particularly visible in communities where anticipation had been building for years. Amazon announced several years ago that Amazon Fresh would open in several Metro Detroit communities, but the stores never materialised. As many as nine Amazon Fresh locations were believed to be in the works.

A recent news report revealed a stark reality regarding these ghost sites. A Detroit Free Press investigation found that the facades and exteriors of seven Amazon Fresh sites were at least partially finished, but the interiors were empty and unfinished.

Specific examples of these stalled projects include a location at the corner of Ann Arbor and Haggerty roads in Plymouth Township, which appeared slated for retail development. Additionally, a store in Dearborn was intended to occupy a former Kroger space on Michigan Avenue near Outer Drive. Neither of the stores ever opened.

Why Amazon Is Betting Billions on Whole Foods Market

While the tech-heavy Amazon Go and Fresh concepts struggled to find their footing, Amazon is doubling down on a more traditional organic grocer. Focusing on growth, Amazon said it plans to open more than 100 new Whole Foods Market stores in the next five years.

This pivot leans into an asset Amazon secured in 2017 when it acquired Whole Foods Market for approximately £10.9 billion ($13.7 billion). The data suggests this is where the customers are actually shopping.

'Customers are increasingly choosing Whole Foods Market for both everyday shopping and special occasions, as demonstrated by record-breaking customer traffic and year-over-year comparable store growth that is outpacing the broader industry.' Amazon said.

In contrast, the company admitted that the economics of their other physical brands simply did not stack up. Amazon called the closing of its Amazon Go, with its shop and 'Just Walk Out' technology, and its Amazon Fresh stores difficult.

'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,' the spokesperson added.

Boosting Delivery Speeds To Reach Millions Of Customers

Despite these physical closures, Amazon remains a dominant force in the sector. According to Amazon, they are one of the top three grocers in the US, with more than £119.5 billion ($150 billion) in gross sales and over 150 million customers shopping for groceries each year.

The company is now channelling resources into logistics rather than brick-and-mortar technology. In mid-December 2025, Amazon announced it would double its same-day delivery of perishable groceries to 2,300 US cities and towns. This means fresh and other grocery items, including things like bananas and blueberries, are now available to some customers for delivery on the same day they're ordered.

Ultimately, the company is stripping back the complexity of its physical presence to focus on speed. Amazon said its goal is to 'make grocery shopping easier, faster, and more affordable for customers.'