Amazon's Brick-and-Mortar Strategy Undergoes Major Shift — Fresh and Go to "Close All Stores," Focus Shifts to Delivery and Whole Foods

Amazon's Brick-and-Mortar Strategy Undergoes Major Shift — Fresh and Go to "Close All Stores," Focus Shifts to Delivery and Whole Foods

Amazon is set to significantly restructure "in-store shopping." On January 27, 2026, Amazon announced its intention to cease operations of its own brand physical stores, Amazon Fresh (supermarkets) and Amazon Go (small, convenience store type), and to close all stores in principle. The closures will proceed in stages, with many stores expected to end operations by early February. Furthermore, some of the closed stores may be converted into Whole Foods Market locations.


"Growth in Online, Focus on Whole Foods"

This decision marks a turning point in Amazon's experiment with physical stores as the "future shopping experience." Amazon Go emerged as a symbol of eliminating checkout lines with its "Just Walk Out" technology, while Amazon Fresh expanded as a "next-generation supermarket created by an online company." However, Amazon acknowledged that it was challenging to scale the unique experiences of Fresh/Go stores in a profitable manner that competitors could not easily replicate.


On the other hand, Amazon is not withdrawing from the grocery business itself. Instead, it is focusing its investments on "delivery" and "Whole Foods." Whole Foods has already established an image of high price and quality, which aligns well with Amazon's membership initiatives. Additionally, Amazon emphasizes the expansion of same-day delivery, combining daily necessities and fresh produce, as the "next growth area." The strategy is to shift the central focus of daily life to the "shopping cart on the app" rather than increasing the number of stores.


Why Fresh/Go Struggled: The "Subtle Difficulties" of Store Operations

A prominent discussion on social media is the surprise that "even a logistics giant like Amazon finds it difficult to operate supermarkets." Indeed, Amazon excels in warehouse and delivery efficiency. However, supermarkets and convenience stores involve procurement, freshness management, shelf allocation, stockout handling, deli operations, staff placement, theft prevention, and misreading local demand—an industry where "small daily failures accumulate." The optimization of online inventory and the reality of store operations are not the same.


Furthermore, there are voices pointing out that Fresh/Go could not become a Walmart-level competitor in "price appeal" nor a strong brand like Whole Foods in "quality and experience," resulting in a lack of clear reasons for customers to choose these stores. Amazon explained that the "economic model was not viable," which can also be interpreted as a failure to achieve decisive differentiation.


Where Does "Cashier-less" Go: The Legacy of Technology

The "Just Walk Out" technology, which symbolized Amazon Go, attracted strong consumer interest, but concerns about operational costs, accuracy, and handling exceptions persisted. On social media, impressions like "convenient but likely costly due to surveillance cameras and sensors" and "troublesome to handle misdetections and returns" are common. The closures highlight the reality that running a retail chain under the banner of technology was far from profitable, rather than a rejection of "cashier-less" itself.


However, even if the store chains close, the technology and lessons learned will not disappear. Amazon can transfer the insights gained from Go to other formats (such as new sections within Whole Foods or logistics and automation efforts). Even if the trial and error in physical stores was a "high tuition fee," it is not a complete loss for Amazon if it contributes to strengthening delivery and existing brands.


Who is Affected: Employees, Communities, Tenants

The concern with closures is employment on the ground. Reports and social media posts express mixed feelings of anxiety and anger, such as "a friend worked there and found out through the news" and "there was not enough explanation from the store." Unlike warehouses, physical stores are the "face" that interacts with local residents, so sudden closures can easily lead to a loss of trust.


In some regions, Fresh was expected to be the "new neighborhood supermarket." Especially in urban areas, some stores were opened in areas with few competitors, leading to concerns like "shopping will become inconvenient if it's gone" and "what will replace it." On the other hand, if some closed stores are converted into Whole Foods, it could alleviate employment and vacant tenant issues to some extent. However, since Whole Foods differs in price range and product lineup, it may not fulfill the same role.


Social Media Reactions: Disappointment, Irony, Acceptance—The "Amazon-like" Split of Opinions

 


Social media reactions can be broadly categorized into six points of discussion.


1) Pure Disappointment: "It was convenient"
Among those who used Fresh regularly, there are many voices lamenting the closures. Individual store experiences were appreciated, with comments like "available even late at night," "surprisingly good deli," and "spacious and comfortable." Particularly, support from those who used it because it was "nearby" will suddenly lose its outlet with the closures.


2) Employee Perspective Concerns: "Lack of prior notice is tough"
On platforms like Reddit, posts continue to highlight the lack of information sharing with employees. While closures can be understood as a management decision, the way it is communicated to staff and the care taken with transfers and compensation are points of concern.


3) Irony and Sarcasm: "In the end, running stores isn't easy"
Comments discussing the gritty realities of store operations are common, with remarks like "even the king of the internet finds supermarkets challenging" and "if shelves aren't stocked, customers won't return." As a reaction to the image of Amazon "dominating everything," there is a sentiment of confirming that "it's not omnipotent."


4) Expectations for Whole Foods: "Welcomed if converted"
There are also voices expressing confidence in Whole Foods over Fresh, with comments like "Whole Foods is more reassuring" and "satisfied with the quality." However, the strong impression of high prices at Whole Foods often comes with the caveat that "conversion doesn't mean shopping will become cheaper."


5) Support for Delivery Shift: "Rational as optimization"
It is natural for Amazon to focus on its strong areas, according to some opinions. Especially in urban areas, if the convenience of same-day delivery and subscriptions improves, there is a growing sense that "it's not a problem even without stores." The view is that it would be welcomed if the delivery experience (time slots, unattended delivery, quality assurance) improves.


6) Reevaluation of Cashier-less Technology: "Ultimately, costs can't be beaten"
Even with a "futuristic feel," repeated speculation suggests that profitability may not be achievable when considering abnormal handling, theft prevention, and system maintenance costs. This reflects both the expectation for the dream of "eliminating retail friction with technology" and skepticism about the real cost structure.


Future Focus: The "Next Store" Beyond Closures

It is too early to declare that Amazon has "given up on physical stores" with this announcement. Amazon is simultaneously discussing new large store concepts, experimental sections within Whole Foods, and the expansion of delivery. In other words, even if the Fresh/Go brand is retired, Amazon is not "completely abandoning" physical stores but is exploring possibilities in other formats while focusing on successful brands (Whole Foods) and areas with clear strengths (delivery).


For consumers, the reduction in stores is less important than "where the friction in shopping moves to." Even if checkout lines disappear, if delivery slots are unavailable, stockouts are frequent, alternative proposals are weak, or there are inconsistencies in freshness, Amazon cannot be the winner. Conversely, if the delivery experience surpasses the reasons to visit a store, Amazon's decision will be seen as ahead of its time.


The closure of physical stores might seem like a declaration of defeat. However, in terms of "folding unprofitable businesses and reallocating resources to winning areas," it reflects Amazon's characteristic cold-bloodedness. The split opinions on social media stem from this cold-bloodedness directly affecting both consumer convenience and employee anxiety. The next evaluation will not be about "how they closed," but how quickly and reliably the "next convenience" can be delivered—that is the sole focus.


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