Amazon on Tuesday said it is closing its Go and Fresh real-world stores to focus on its Whole Foods markets and online grocery delivery.
Go and Fresh shops doubled as innovation centers for Amazon, which tested systems such as eliminating checkout stations and automatically billing customers for the items they have with them as they leave the store.
“Go and Fresh showed what was technologically possible, but not what was viable economically,” said Emarketer senior analyst Zak Stambor.
“The bet is that mass-market groceries sell more efficiently through same-day delivery, with Whole Foods as its primary physical retail brand.
Grocery sales at Amazon’s same-day delivery service grew 40-fold in the past year and an option for ultra-fast delivery of fresh food and other items in 30 minutes or less is being tested, according to the company.
Amazon will “continue inventing on behalf of customers to develop a mass physical store format that brings customers distinctive selection, value, and convenience,” the e-commerce giant founded by Jeff Bezos said in a blog post.
Ideas being explored include a new retail supercenter where people can shop for groceries, household essentials and general merchandise, according to Amazon.
Amazon aims to open more than 100 new Whole Foods stores in coming years, with some Go and Fresh shops being converted into Whole Foods outlets.
Whole Foods sales have grown 40 percent, and the number of stores has increased to more than 550 locations, since the chain was bought by Amazon in 2017, the retail titan said.
The deal was valued at $13.7 billion.
Amazon ranked itself as one of the top three grocers in the United States.
“We believe Amazon’s reallocation of resources towards the Whole Foods and fast delivery experience likely benefits the logistics flywheel,” Baird Equity senior research analyst Colin Sebastian said in a note to investors, reasoning that the grocery business is a large growth opportunity for the company.
