Amazon is shutting down four more Fresh supermarkets in Southern California, marking the latest chapter in the e-commerce giant's turbulent grocery strategy. The closures follow eight other U.S. store shutdowns this year and Amazon's decision to close 14 UK Fresh locations, signaling a decisive pivot toward Whole Foods and delivery-first operations.
Amazon is pulling back from its Fresh grocery experiment once again. The company confirmed it's closing four more supermarkets across Southern California - in Mission Viejo, La Habra, Whittier, and La Verne - as it continues reshaping its grocery strategy around Whole Foods and delivery services.
The timing feels anything but random. Just last week, Amazon announced plans to shutter 14 Fresh stores across the UK while converting five others into Whole Foods locations. Add in the eight other U.S. closures this year - spanning Washington, Virginia, New York, and Los Angeles - and a clear pattern emerges.
"Certain locations work better than others, and after an assessment, we've made the decision to close these Amazon Fresh locations," Amazon spokesperson Griffin Buch told CNBC. The company says it's helping affected employees find new roles within Amazon wherever possible.
Employees at the La Verne location got the news during an all-hands meeting Wednesday, according to internal messages. They learned the store would close by mid-November and that severance packages were coming - a conversation that's become all too familiar across Amazon's grocery operations.
This retreat represents a dramatic shift from Amazon's ambitious grocery expansion just three years ago. The company launched Fresh in 2020 with dreams of capturing mass-market shoppers, distinct from Whole Foods' upscale positioning. By 2022, Amazon was opening Fresh stores at a breakneck pace, riding high on pandemic-era grocery demand.
But reality hit hard when CEO Andy Jassy launched company-wide cost-cutting in 2022. Rising interest rates and inflation pressures forced Amazon to pause Fresh expansion entirely in 2023 while evaluating how to make the chain profitable. The company even stripped out its "Just Walk Out" cashierless technology from Fresh stores last year, admitting the futuristic shopping experience wasn't resonating with customers.
The numbers tell the story of Amazon's grocery struggles. Despite nearly two decades of effort - starting with Amazon Fresh delivery in 2007 and the massive $13.7 billion Whole Foods acquisition in 2017 - the company still hasn't cracked the grocery code. While Amazon maintains over 60 remaining Fresh stores in the U.S., that's a fraction of what executives once envisioned.
Meanwhile, Amazon's doubling down on what actually works. The company operates 500 Whole Foods locations and recently opened mini "daily shop" Whole Foods stores in New York City. It also launched a new "price-conscious" grocery brand Wednesday and expanded same-day delivery of fresh foods to more U.S. regions last month.
Jassy remains publicly optimistic. At Amazon's annual shareholder meeting in May, he called grocery a "significant business" and said he's still "bullish" on the sector. Company executives frequently highlight strong sales of "everyday essentials" like canned goods and household items through Amazon's online grocery platform.
But actions speak louder than corporate talking points. Amazon's Fresh retreat suggests the company has concluded that competing with traditional grocers on their own turf - physical stores in suburban strip malls - isn't worth the investment. Instead, Amazon's betting its grocery future on premium positioning through Whole Foods and convenience through delivery, leveraging its core strengths in logistics and customer experience.
Amazon's Fresh store closures signal more than just operational adjustments - they represent a fundamental shift in how the company approaches grocery retail. Rather than trying to beat traditional grocers at their own game, Amazon is focusing on what it does best: premium experiences through Whole Foods and seamless delivery. The question now is whether this more focused approach can finally unlock the grocery market that has eluded Amazon for nearly two decades, or if the company will continue struggling against entrenched competitors like Walmart and regional chains that have decades of experience in the low-margin grocery business.
