Amazon Re-centers Its Grocery Strategy Around Whole Foods and Delivery

Amazon is closing all of its Amazon Fresh and Amazon Go physical stores as it reshapes its grocery strategy. The company said most locations will close by February 1, 2026, with some California stores remaining open longer due to state regulations.

The closures include 57 Amazon Fresh grocery stores and 15 Amazon Go convenience stores across the U.S. Amazon said that some of these locations may be converted into Whole Foods Market stores, while others will be permanently closed. Amazon Fresh will continue to operate as an online grocery delivery service.

The move follows what Amazon described as a careful evaluation of its physical grocery business. While the company cited “encouraging signals” in Amazon-branded stores, it acknowledged that it had not yet delivered a customer experience paired with an economic model capable of supporting broad expansion. That assessment reflects a reality familiar to grocery operators: innovation alone does not guarantee scale.

A return to the strongest physical banner

Amazon is not exiting brick-and-mortar grocery. Instead, it is doubling down on Whole Foods Market, the brand it acquired in 2017 for $13.5 billion. Amazon plans to open more than 100 new Whole Foods stores over the next several years, reinforcing Whole Foods as the centerpiece of its physical grocery footprint.

The company is also expanding Whole Foods Market Daily Shop, a smaller-format concept designed for quick trips and dense urban areas. Amazon said it plans to open five additional Daily Shop locations by the end of 2026.

Whole Foods has shown sustained momentum since the acquisition. Amazon has reported that sales at the chain have grown by more than 40 percent, a performance profile that stands in contrast to the uneven results of Amazon Fresh and Go stores.

Delivery continues to gain weight

At the same time, Amazon is accelerating grocery delivery coverage. In 2025, the company expanded same-day perishable grocery delivery to customers in more than 1,000 U.S. cities and towns, with plans to reach over 2,300 locations. Separate reporting indicates Amazon’s grocery delivery services now reach 5,000 U.S. locations, underscoring how fulfillment scale has become central to Amazon’s grocery ambitions.

This delivery-first approach reflects changing shopper behavior, where grocery increasingly overlaps with broader household purchasing. Amazon’s model allows customers to combine fresh food, center-store items, and general merchandise into a single order delivered within hours.

Store innovation is narrowing, not stopping

While Amazon Fresh and Go are being phased out, Amazon continues to test physical retail concepts. These include an Amazon Grocery format piloted within select Whole Foods stores, as well as a larger-format store concept that blends groceries with household essentials and general merchandise.

Technology developed through Amazon Go also continues beyond those stores. The company’s “Just Walk Out” checkout technology is now used in more than 360 locations globally, including third-party venues and licensed deployments.

What this signals for the industry

Amazon’s decision does not offer a simple takeaway, but it does surface several signals worth watching closely.

First, format clarity matters. Amazon is choosing to invest behind the grocery banner with the clearest customer promise and strongest brand equity, while pulling back from formats that struggled to differentiate at scale.

Second, economics remain unforgiving. Grocery remains one of the most operationally complex retail categories. Amazon’s acknowledgment that it had not yet found the right economic model for Fresh and Go reinforces how difficult it is to balance labor, shrink, price perception, and convenience profitably.

Third, the grocery “trip” continues to evolve. Amazon’s expansion of same-day perishables points to a future where grocery shopping is less about store visits and more about how items are assembled into digital carts, substituted, and delivered alongside non-food purchases.

Finally, integration is accelerating. Amazon has increasingly aligned its grocery operations around Whole Foods leadership and infrastructure. How that integration shapes assortment decisions, private brand development, and supplier relationships will be closely watched by retailers and CPG partners alike.

Amazon’s move represents a narrowing of focus rather than a retreat. By reallocating capital toward Whole Foods expansion, delivery coverage, and fewer physical experiments, Amazon is signaling where it believes grocery scale and differentiation are most likely to converge next.

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