The situation: The signs continue to mount that the days for Amazon Fresh, the mass-market grocery concept, may be numbered as the retail giant sharpens its focus on growing online sales and expanding Whole Foods’ footprint.

Zooming in: Following the shuttering of several stores in the US and all UK locations, Amazon CEO Andy Jassy said on the company’s earnings call that while it has “talked a lot about having a larger mass physical presence,” it is continuing “to experiment with various formats”—without commenting about Fresh’s future.

• Those tests include a micro-fulfillment center attached to a Whole Foods in Pennsylvania and a two-level Chicago store that combines an Amazon Grocery on the ground floor (featuring mass-market products like Coca-Cola and Tide Pods) with a Whole Foods on the second level.
• However, Jassy’s main focus appears to be expanding Amazon’s same-day delivery service for fresh groceries to about 2,300 locations by late 2025. The expansion would let shoppers add perishables to their regular orders and receive everything within hours, supported by temperature-controlled facilities, insulated packaging, and strict quality checks.

Our take: Amazon’s apparent pivot from its push into large-format grocery stores can be viewed two ways.

• On one hand, it seems to be ceding ground to Walmart, its chief rival, whose vast physical footprint anchors its dominance of the US grocery landscape.
• On the other hand, Amazon sees an opportunity to expand its grocery share in a far more cost-effective manner. Excluding Whole Foods and Fresh, the company says it generated over $100 billion in grocery-related gross merchandise sales over the past 12 months, which would be enough to make it the third-largest grocer in the US.

Jassy appears to be making a strategic bet that if customers who already buy middle-aisle staples like shampoo or pet food can also add perishables such as milk and eggs to the same cart—and receive them within hours—it could reshape consumers’ weekly in-store grocery stock-up habit. That shift would be significant, since 57% of grocery shoppers still make most of their purchases in physical stores, and it could also spare Amazon the steep costs of acquiring or building a large network of brick-and-mortar locations.

At the same time, Amazon remains committed to expanding its upscale Whole Foods brand, including the rollout of smaller-format Whole Foods Market Daily Shop locations.