Amazon CEO Andy Jassy says the company plans to “go big” on physical retail stores in 2023, blaming a lack of “normalcy” during the pandemic for its stumbles
Andy Jassy says ecommerce giant will double down on grocery despite recent stumbles
Context & Ripple Effects
This pledge lands mid-cleanup: Andy Jassy spent his first year reversing some of Jeff Bezos' aggressive pandemic investments, including closing physical stores, per a look at his first year as CEO. The "go big" commitment extends a decade-long ambivalence — Bezos floated more physical stores back in his 2016 shareholder-meeting remarks, followed by exploratory store concepts for furniture and electronics in 2017 and a 2021 plan for large-format US stores.
The grocery emphasis is the throughline: convenience-store and curbside pickup experiments date to at least 2016, so Jassy's doubling down reframes an old bet rather than starting a new one.
First-order effects
- Amazon commits 2023 capital and leadership attention to opening physical stores, with grocery as the priority format, even as Jassy simultaneously trims other pandemic-era bets.
- Jassy publicly attributes the earlier stumbles to pandemic-era disruption rather than a flawed store thesis, signaling the physical-retail program survives his broader cost-cutting review.
Second-order effects
- The pledge raises execution risk inside Amazon's own portfolio: the later record shows the Amazon Go chain was cut by roughly half from its early-2023 size, meaning the formats scaled up under this push were also being winnowed (Amazon Go shrank to 16 stores across four states).
- Grocery incumbents face a well-capitalized entrant treating stores as an extension of its logistics network rather than standalone retail, pressuring pricing and pickup convenience.
Third-order effects
- If the pattern holds, Amazon's store strategy consolidates around grocery as the only format worth the fixed cost — with cashierless and convenience experiments treated as disposable pilots rather than core infrastructure.
- The episode becomes a case study in how a post-founder CEO distinguishes durable strategic commitments from pandemic-era overexpansion, with each reversal resetting investor expectations for what counts as a core business.
The trend: Amazon keeps oscillating between retreat and recommitment in physical retail, with grocery emerging as the anchor format that survives each cycle of Jassy's cost discipline.