Grocery Graveyard 2024: Hy-Vee, Amazon, Instacart Bury Formats

By Marcus Bennett

Amazon will close all of its physical Amazon Fresh and Amazon Go stores, ending a five-year run in conventional supermarket retail that started with the first Amazon Fresh location. That's the biggest headstone in this year's grocery graveyard — but it's far from the only one. Store formats that once looked promising got buried across the industry in 2024.

The company said it will convert an unspecified number of the closing locations into Whole Foods Market stores. How many, and how fast, Amazon didn't say. The silence on specifics is worth noting.

What happened to Hy-Vee's dollar stores?

Hy-Vee is ditching its discount format. CEO Jeremy Gosch announced in September, during a Groceryshop keynote, that all Dollar Fresh Market stores will be rebranded under the Hy-Vee banner.

This was a slow death. In January, Hy-Vee rebranded four of its 22 Dollar Fresh stores — a signal the format was having trouble generating sales. Hy-Vee launched Dollar Fresh in 2018 to compete with dollar retailers. Six years later, the experiment is over.

The takeaway: even a proven regional grocer couldn't crack the dollar-store model.

Why did Schnucks close another small-format store?

Schnuck Markets shut its 18,000-square-foot Schnucks Fresh location in Jasper, Indiana, in May. CEO Todd Schnuck said the location "simply has not generated the business it needs to stay open."

One Fresh store survives, in Oak Grove Village, Missouri, which opened in 2023. A company spokesperson said in May that Schnucks doesn't plan to open any others under that banner. The Jasper closure came roughly two years after Schnucks announced it would wind down Eatwell Market, its natural and organic banner.

The takeaway: that's two formats down for Schnucks in under three years.

Could a butcher shop shrink to convenience-store size?

Fareway tested the answer with a 2,300-square-foot Fareway Meat Market in Luverne, Minnesota, complete with a full-service butcher counter. The store opened in 2022 and closed in mid-January. The company said the small size hindered its success. So no — the math on a full butcher counter in 2,300 square feet didn't work.

Is Amazon's partner-program shutdown next?

Earlier this month, Amazon confirmed to Grocery Dive it will close an unspecified number of grocery partner storefronts on Amazon.com. The move effectively ends a program that powered e-commerce for other grocers.

Amazon said dropping individual storefronts will simplify the shopping experience and that it will guide shoppers to the best grocery options on its marketplace as storefronts close. It also frees the company to focus on its own grocery e-commerce business — the part it actually owns. Again, the number of affected storefronts went unspecified.

Are smart carts dead too?

Instacart says yes. The company announced Monday it will stop offering Caper Cart smart carts to grocers, calling it the next phase of its in-store strategy. Instacart had electrified the category when it acquired Caper AI in 2021, but retailers never adopted the carts at scale.

"While Caper is a great product, the business reality is that retailer adoption has not scaled quickly enough to justify our continued investment," Instacart said in a press release.

The takeaway: a good product with weak unit economics is still a dead product.

What does all this tell retailers?

The common thread across these closures isn't bad ideas — it's ideas that never hit the scale needed to pay for themselves. Amazon, Hy-Vee, Schnucks, Fareway and Instacart all bet on new formats or tech, and all pulled back within two to six years of launch. Expect the survivors to consolidate around proven banners and marketplace models in 2025.