Amazon Fresh to Close All US Stores as Grocery Chain Struggles to Resonate with Customers

Workers say the Amazon-owned grocery chain failed to differentiate itself from Whole Foods and lacked a clear customer experience.

Published on Jan. 31, 2026

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Amazon announced it will close all of its roughly 60 Amazon Fresh grocery stores in the US, marking the latest setback in the company's efforts to expand its physical retail presence. According to current and former Amazon Fresh employees, the chain struggled to resonate with customers and differentiate itself from Whole Foods, which Amazon acquired in 2017. Some customers were confused by the differences between the two grocery brands, while Amazon Fresh's eclectic product mix and underutilized in-store technology failed to draw consistent foot traffic.

Why it matters

Amazon's inability to successfully launch and scale Amazon Fresh highlights the challenges the tech giant has faced in cracking the highly competitive and low-margin grocery industry, where it lags far behind market leaders like Walmart. The closure of Amazon Fresh stores also marks the end of the company's broader experiment with physical retail formats beyond its Whole Foods acquisition.

The details

Amazon Fresh stores offered more affordable groceries and some products not sold at Whole Foods, while also showcasing Amazon's technology like Just Walk Out checkout and smart shopping carts. However, employees said the stores often struggled with overstocking on non-food items like hair dye, while ready-to-eat foods frequently went unsold. The eclectic product mix left many customers without a clear reason to return, unlike more curated grocery chains. Amazon's in-store tech also saw lukewarm adoption, with customers often bypassing features like Just Walk Out.

  • Amazon opened the first Amazon Fresh stores in 2020 after acquiring Whole Foods in 2017.
  • In 2024, Amazon pulled the Just Walk Out technology from Amazon Fresh stores.
  • Last year, Amazon put on hold plans to sell its Dash Carts, smart shopping carts, to other retailers.

The players

Amazon

The technology and retail giant that acquired Whole Foods in 2017 and launched the Amazon Fresh grocery chain in 2020.

Whole Foods

The organic and natural foods grocery chain that Amazon acquired in 2017 and plans to continue expanding as its sole remaining physical retail brand.

Jason Buechel

The Whole Foods Chief Executive who was put in charge of Amazon's entire Fresh grocery operation last year in an effort to better integrate the two brands.

Phil Lempert

A food industry analyst and editor of the website SupermarketGuru who said Amazon Fresh lacked a clear draw for shoppers compared to more curated grocery chains.

Numerator

A market-research firm that estimates Walmart controlled about 21% of the US grocery market as of September, while Amazon and Whole Foods each held roughly 1.6%.

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What they’re saying

“I would run into people looking for a specific product from Whole Foods.”

— Amazon Fresh employee (Business Insider)

“They tried everything, and I think that that was, frankly, the downfall.”

— Phil Lempert, food industry analyst and editor of SupermarketGuru (Business Insider)

“Just For Men is not really a hot seller at an Amazon food store. But we still have two cases of it in the back.”

— Amazon Fresh employee (Business Insider)

What’s next

Amazon plans to expand its Whole Foods brand and grocery delivery services as it continues to compete with major grocery chains like Walmart.

The takeaway

Amazon's inability to successfully launch and scale Amazon Fresh underscores the challenges the tech giant has faced in penetrating the highly competitive grocery industry, where it has struggled to differentiate itself and build a loyal customer base compared to more established players.