A look at Amazon Fresh's challenges, including lawsuits, layoffs, and halted projects; a former employee says staff were told 2023 could be “make or break”
Lawsuits and layoffs now litter Amazon's years-long path to conquering the brick-and-mortar grocery store. Bluesky: @glinden.bsky.social . LinkedIn: Brittain Ladd Bluesky: Greg Linden / @glinden.bsky.social : I wondered what would happen to Amazon Fresh sales after they raised their delivery fees steeply earlier this year. I assume sales cratered, but I don't think Amazon has disclosed numbers yet. [embedded post] LinkedIn: Brittain Ladd : A SIMPLE PLAN GONE AWRY — My compliments to Caroline O'Donovan of The Washington Post for the article I've attached. …
Context & Ripple Effects
The [[a:964013|expansion plan that once targeted at least 28 more Amazon Fresh stores on top of the 11 already open]] has curdled: lawsuits, layoffs, halted projects, and a steep delivery-fee hike that analysts assume cratered undisclosed sales. A former employee's "make or break" framing captures a grocery business that Amazon itself is about to restructure with the biggest grocery overhaul since the Whole Foods acquisition.
The stakes reach past Amazon. Back in 2019, [[a:948588|the Amazon threat was forcing a risk-averse grocery industry to experiment with smart carts, dynamic price tags, and automated warehouses]] — so whether Fresh's tech-forward format survives shapes how aggressively conventional grocers keep investing in store technology. The arc this story sits on ends, in later coverage, with [[a:1162217|Amazon closing all 57 Fresh and 15 Go US locations and consolidating physical retail around Whole Foods]].
First-order effects
- Amazon Fresh staff face layoffs and shelved projects, with internal messaging framing 2023 as make-or-break for the grocery unit.
- The steep delivery-fee increase earlier in 2023 hits Fresh's own sales, which Amazon has not disclosed but analysts assume fell sharply.
Second-order effects
- The grocery-overhaul rollout — including a single cart spanning supermarket offerings — becomes Amazon's attempt to rescue a format whose expansion economics no longer work, redirecting capital from new stores to retrofitting the fleet.
- Rival grocers that experimented with smart carts and automated warehousing to counter the Amazon threat lose the forcing function, easing pressure on their tech spending.
Third-order effects
- If the pattern holds, Amazon's grocery bet consolidates around Whole Foods as the surviving physical banner, with Fresh's tech-led store format absorbed or abandoned rather than scaled.
- The industry-wide lesson — that checkout-free and tech-heavy store formats must clear conventional grocery margins — would slow the diffusion of store automation beyond Amazon's own retreat.
The trend: Amazon's physical grocery strategy is contracting from a parallel tech-forward chain back to Whole Foods, marking the limits of exporting e-commerce playbooks into brick-and-mortar.