Jassy praised Amazon-Whole Foods for its selection and growth, but said, “If you want to have a massive brick-and-mortar offering, you need a different kind of product.” The CEO said that’s exactly what Amazon has been working on with its Amazon Fresh stores.

But the e-commerce giant has yet to find a product that fits Amazon Fresh.

Chief Financial Officer Brian Olsavsky said on the same call that Amazon closed some Amazon Fresh and Amazon Go stores with “low growth potential” last quarter, resulting in an impairment charge of $720 million.

Jassy went on to reveal that Amazon’s leadership decided to pause expansion beyond existing fresh stores while retooling to find the right products for consumers.

Jassy said, “We’ve decided in the last year or so that we won’t expand the doors of our physical fresh stores until we have the differentiation and economic value we like in the equation, but we’re optimistic that we’ll get there in 2023. We’re working hard. We’re seeing some encouraging signs. When we find that equation, we will expand it more broadly.”

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