Amazon said Tuesday it will close its physical Amazon Fresh and Amazon Go grocery stores to concentrate on delivery services and expand Whole Foods, driving its stock up about 2% that day. The company said it will open more than 100 new Whole Foods locations and grow the smaller-format Whole Foods Market Daily Shop to reach more customers.
“While we’ve seen encouraging signals in our Amazon-branded physical grocery stores, we haven’t yet created a truly distinctive customer experience with the right economic model needed for large-scale expansion,” the company said, and it plans the new openings to refocus its grocery strategy.
Analysts remain broadly positive on AMZN, with price targets ranging from $244 to $340 while the stock trades near $244.29, and an average target of $294.45 implying roughly 25.65% upside. Cantor Fitzgerald recently kept an Overweight rating with a $260 target, and both Wedbush and Bank of America Securities maintain Buy ratings.
Risks persist, including a reported round of layoffs affecting about 30,000 employees, which briefly pressured the stock before the grocery shift news. Amazon also agreed to a settlement worth more than $1 billion to resolve return-refund claims, with over $600 million already distributed or soon to be paid to customers.
