As any local shop owner will tell you, running a brick-and-mortar business in the age of Amazon is an uphill battle. That’s a lesson that Amazon itself has just learned.
The e-commerce giant said on Tuesday that it was closing its Fresh grocery stores as well as its automated grab-and-go Go shops, adding to its list of failed brick-and-mortar experiments.
“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 explained in a post on its website.
The move came a day ahead of Amazon’s announcement on Wednesday of 16,000 corporate layoffs, including some related to the Go and Fresh closures. That was on top of 14,000 layoffs last year as part of Amazon CEO Andy Jassy’s campaign to rein in what he sees as creativity-stifling bureaucracy. The company is also shifting resources to building AI data centers.
Amazon’s 550-store Whole Foods chain, which it bought in 2017, will remain open with plans to expand. But the brand’s 58 Amazon Fresh stores, launched in 2020 as smaller grocery stores focused on the mass market, never found their niche. Amazon’s Go convenience stores, launched in 2018 and a major priority for founder Jeff Bezos, allowed consumers to avoid checkout lines thanks to an array of cameras and sensors that tracked each item a shopper picked up from a shelf and automatically charged the customer for it when they left the store. But the dazzling tech was not enough to camouflage how blah the merchandise was.
