Editor's View: Why Amazon Walked Away From Fresh

Amazon’s decision to close all 14 of its UK Amazon Fresh grocery stores marks a major strategic shift — but far from a withdrawal from the grocery sector, it represents a calculated refocus on what the tech giant does best.

By the end of 2026, five of the shuttered Fresh outlets will be converted into Whole Foods Market stores, bringing the company’s UK Whole Foods portfolio to 12 branches, including new sites in Chelsea and Greater London. This rebalancing of resources underscores a move towards optimising rather than expanding — prioritising profitability, performance, and consumer preference.

The “Just Walk Out” experiment lost its shine

When Amazon launched Fresh stores, the company envisioned a new era of frictionless shopping powered by its “Just Walk Out” technology — a cashierless system that automatically charged customers as they exited. It was bold, futuristic, and quintessentially Amazon.

But reality proved far less seamless. The system relied on intricate networks of sensors, cameras, and human reviewers to verify purchases — creating high operational costs and occasional errors that frustrated shoppers. What was meant to feel effortless sometimes became confusing, and the customer experience simply didn’t scale at the pace Amazon had hoped.

The company eventually began rolling back “Just Walk Out” in favour of smart trolleys and app-based scanning, but by then the model’s momentum had slowed.

Grocery retail margins are unforgiving

The grocery sector is notoriously tough terrain. Between rising costs, inflationary pressures, and intense competition from established supermarkets, carving out market share is a daunting task even for a global powerhouse.

Amazon’s physical grocery stores needed to deliver fast, measurable returns to justify their existence. With margins as tight as they are, the in-store Fresh model proved too costly to sustain. Closing the stores allows Amazon to redirect investment towards higher-growth areas — namely online grocery and same-day delivery.

Consumers still want a human touch

Technology can simplify the shopping process, but it can’t replicate the human connection many shoppers still value. For all the talk of automation, consumers continue to enjoy browsing produce, asking questions, and getting recommendations from real people.

Research consistently shows that around half of UK adults prefer stores where they can speak to staff, and a clear majority favour retailers offering personal interaction. In that sense, Amazon Fresh’s ultra-digital environment may have felt a little too cold for a category — like fresh food — that’s inherently sensory.

The New Play: Online Grocery Dominance

While the Fresh store closures might appear like a step back, they’re part of a much bigger advance. Amazon’s grocery focus is now firmly online — and this is where the company’s infrastructure, data expertise, and delivery networks truly shine.

The grocery and household essentials category on Amazon is one of its fastest-growing segments in the UK, outpacing many other product categories this year. The company is expanding its same-day delivery offering for perishable goods such as meat, dairy, and frozen food, while integrating these services into its main platform, Amazon.co.uk.

Crucially, Amazon is strengthening its partnerships with established retailers including Morrisons, Co-op, Iceland, and Gopuff. These alliances give customers access to fresh food through Amazon’s interface without the company having to shoulder the enormous costs of maintaining hundreds of physical stores. Over 80% of Prime members now have at least one of these grocery options available via the platform.

A Smarter Future For Physical Retail

Amazon’s Fresh experiment wasn’t a failure — it was a data-gathering mission. Every footstep, scan, and checkout provided insights into how people shop, how they navigate aisles, and what technology actually enhances their experience.

Those learnings will inform Amazon’s next generation of physical retail — stores that are leaner, more data-driven, and better integrated with its digital ecosystem.

Industry watchers expect Amazon to return to bricks-and-mortar grocery eventually, but in a more refined form: fewer stores, smarter tech, and clearer alignment with the company’s delivery and logistics infrastructure.

A Calculated Course Correction

The closure of Amazon Fresh stores is less a story of retreat and more one of realism. It highlights a business unafraid to experiment, fail fast, and pivot based on evidence. The company has recognised that its strengths lie in digital retail, logistics, and data — not necessarily in competing head-to-head with traditional supermarkets on the high street.

In short, Amazon hasn’t given up on grocery — it’s simply rewriting the rulebook.