NEW YORK (AP) — Amazon has announced the closure of nearly all its Amazon Go and Amazon Fresh stores, as the company shifts its focus towards food delivery services and its grocery chain, Whole Foods Market. This decision comes shortly after Amazon revealed plans to cut around 16,000 corporate jobs, marking its second round of layoffs in just three months.
According to a blog post from the Seattle-based company, some of the shuttered Amazon Go and Amazon Fresh locations will be transformed into Whole Foods stores. The final operational day for these outlets will be Sunday, with the exception of locations in California, which will remain open for a longer duration to meet state requirements.
CEO Andy Jassy previously stated that the job cuts are not a result of financial troubles or advancements in artificial intelligence, but rather a reflection of changing priorities within Amazon and the specific types of businesses it wishes to pursue. The company acknowledged that while there have been "encouraging signals" at Amazon-branded physical grocery stores, it has not yet succeeded in creating a unique customer experience alongside a viable economic model for large-scale growth.
Since acquiring Whole Foods Market in 2017, Amazon has experienced over a 40% increase in sales and has expanded to more than 550 locations. The company intends to open more than 100 new Whole Foods Market stores in the upcoming years. Additionally, Amazon stated that shoppers are increasingly opting for online grocery delivery, with the company currently providing delivery services in 5,000 U.S. cities and towns. In many areas, customers can also enjoy same-day delivery of fresh produce and other perishables, which Amazon plans to expand based on positive customer feedback.
Moreover, Amazon revealed plans to introduce "supercenter" locations that will offer groceries and other products, although specific details about these new stores have not yet been disclosed. The first Amazon Go location was launched eight years ago in Seattle, featuring a novel shopping experience where consumers can select items and simply walk out without going through a checkout process. Charges are applied once the customers leave the store.
The company referred to Amazon Go locations as "innovation hubs," highlighting that the "just walk out" technology is now in use at more than 360 third-party locations across five countries. This technology is also being expanded within Amazon’s own infrastructure, currently utilized in over 40 North American fulfillment centers' breakrooms, allowing employees to obtain meals without delays at checkout. Expansion of this feature is planned for later this year.
Amazon introduced its first Amazon Fresh stores in 2020, but with the recent strategic shift, it appears that the company aims to streamline its grocery operations while enhancing its presence through Whole Foods Market. This transition highlights Amazon’s commitment to adapt to current market trends, focusing on consumer preferences and convenience.
