The news: Amazon will close four Fresh supermarkets in Southern California, just weeks after announcing plans to shutter all 19 of its UK Fresh stores and convert five of them into Whole Foods locations.

The move follows Fresh closures earlier this year in Washington, Virginia, New York, and a Los Angeles suburb.

Together, the closures suggest that the end may be near for the retail giant’s mass-market grocery concept.

The context: Three years after acquiring Whole Foods, Amazon introduced Fresh in 2020 to capture a broader slice of the grocery market.

• The stores centered on technology, featuring contactless “Just Walk Out” functionality also found in Amazon Go, and smart Dash Carts that let customers skip traditional lines.
• However, the concept never fully resonated with shoppers, many of whom described the stores as “soulless.” Within a few years, Amazon redesigned the format with brighter colors, expanded assortments, and even Krispy Kreme doughnut and coffee stations to create a more welcoming aura.
• Those struggles led to an 18-month pause in Fresh’s expansion, after which Amazon dropped its “Just Walk Out” system from supermarkets to offer a more familiar, conventional experience.
• More recently, the company has worked to unify its grocery ecosystem, aligning Whole Foods, Amazon Go, and Fresh under a single strategy.

Trying to find the right fit: Despite Fresh’s challenges, CEO Andy Jassy earlier this year said he remains “very bullish” on grocery. And the retailer continues to look for ways to grab a larger share of the $1.61 trillion US grocery market.

• Amazon is rapidly expanding same-day grocery delivery, aiming to reach over 2,300 US cities by year-end. The service lets customers order fresh groceries and other items for delivery within hours, supported by temperature-controlled facilities and quality checks.
• Prime members get free delivery on orders over $25 (or pay $2.99 below that), while nonmembers pay $12.99 per order. Early pilots showed strong demand—75% of 2025 users were new to Amazon’s grocery service, and 20% reordered within a month. Jassy said these shoppers buy twice as often as those who skip fresh food.
• The company also recently launched Amazon Grocery, a private-label line with most items priced under $5, aimed squarely at inflation-stung shoppers both online and in Amazon Fresh stores.
• It’s been experimenting with a variety of formats—from Whole Foods pickup expansions and same-day fulfillment centers to hybrid stores like a two-level Chicago location that pairs an Amazon Grocery on the first floor with a Whole Foods above. While some models show promise, none have yet cracked the offline code.

The Walmart challenge: Amazon’s efforts to garner a larger share of the grocery market are aimed at countering Walmart, which remains the dominant player both offline and online.

• Nearly 60% of Prime members bought groceries online from Walmart in the year ended April 2025, compared with 52% who did so on Amazon’s platforms, per Coresight Research.
• Walmart’s broad footprint and value image continue to attract more Americans—including affluent shoppers—eroding Amazon’s market share. The share of households naming Walmart as their primary grocer rose nearly a point in June, per Brick Meets Click/Mercatus. And 1 in 4 households that ordered groceries from supermarkets also shopped at Walmart, up 400 basis points YoY.
• A Bizrate Insights survey for EMARKETER found 70% of US digital buyers purchased food or beverages from Walmart in June, versus 54% for Amazon.

Our take: Grocery remains one of Amazon’s toughest puzzles to solve. With 57.2% of US grocery shoppers primarily shopping in stores and 86.3% of US grocery sales still offline, no retailer can become a true category leader without meaningful physical scale. Yet Amazon operates only 57 Fresh stores and 527 Whole Foods locations—a far cry from Kroger’s roughly 2,800 and Walmart’s 4,600.

Though digital investments such as delivery expansion and private labels show ambition, the retailer still doesn’t appear to have a clear formula. Unless Amazon makes a major grocery acquisition, its efforts to become a dominant omnichannel grocer are likely to remain piecemeal.