E-commerce juggernaut Amazon is once again pulling back on its brick-and-mortar expansion, shuttering some of its Amazon Fresh supermarkets and halting the chain's rollout, as well as closing a number of Amazon Go convenience stores.

The Seattle-based online giant discussed curtailing its foray into the competitive and low-margin grocery sector during a fourth-quarter earnings call Thursday, where the company reported results far behind the growth it enjoyed during the pandemic and shortly after it. And it's been cost-cutting as a result, with layoffs, a slowdown in industrial growth as well as store closings.

Both Amazon Chief Financial Officer Brian Olsavsky and CEO Andy Jassy discussed Amazon Fresh, Amazon's fledgling startup grocery chain, and Amazon Go, its cashierless stores. And they said the Fresh concept needs refining.

"We're continuously refining our store formats to find the ones that will resonate with customers, will build our grocery brand and will allow us to scale meaningfully over time," Olsavsky told Wall Street analysts. "As such, we periodically access our portfolio of stores and decided to exit certain stores with low growth potential. We'll also take an impairment on capitalized costs and associated values of our leased buildings. ... We continue to believe grocery is a significant opportunity, and we're focused on serving customers through multiple channels, whether that's online delivery, pickup, or in-store shopping."

As a result of the Amazon Fresh and Amazon Go closings, Amazon took a $720 million impairment charge — relating to property, equipment and operating leases — in the fourth quarter, according to Olsavsky.

The company, which acquired the Whole Foods Market chain for $13.7 billion in 2017, has faltered in its own ventures into the brick-and-mortar retail segment and been paring back its physical footprint. In March last year the company pulled the plug on 68 stores representing three chains, namely its Amazon 4-star, Amazon Pop Up and Amazon Books locations in the United States and Great Britain.

"Amazon has always been willing to try new concepts and gives their teams the resources to go for it," Bill Read, executive vice president at Retail Specialists, said in an email to CoStar News on Friday. "Unfortunately not many of the retail ventures have proven to be successful and Amazon is not willing to lose money on operations for a extended period. Grocery is a low-margin business and they gave it a really good effort. Pausing expansion and examining the concept is a prudent step."

On the earnings call, Jassy spoke at length about Amazon Fresh and the supermarket business. There are 44 Fresh stores now, according to the company website.

"I'd just start by saying that we think grocery is a really important and strategic area for us," he said. "It's a very large market segment, and there's a lot of frequency in how consumers shop for grocery."

Whole Foods differentiates itself by offering the "best organic physical store experience and selection," according to Jassy, and Amazon Fresh needs to find a way to stand out, as well.

"And that's what we've been working on with Amazon Fresh, and we have a few dozen stores so far," he said. "We're doing a fair bit of experimentation today in those stores to try to find a format that we think resonates with customers, it's differentiated in some meaningful fashion and where we like the economics. And we've been, we've decided over the last year or so that we're not going to expand the physical Fresh doors until we have that equation with differentiation and economic value that we like, but we're optimistic that we're going to find that in 2023."

Jassy added, "We see some encouraging signs. And when we do find that equation, we will expand it more expansively. But I think that we have a very significant opportunity in the grocery segment."

The first Amazon Fresh store in debuted in Woodland Hills, California, in August 2020. The chain pushed into the Northeast with openings in Paramus, New Jersey, and Oceanside, New York, last year.

Neil Saunders, managing director of GlobalData, issued a note on Amazon's results.

"Looking in more detail at the fourth quarter, overall sales rose by 8.6%," he said. "This looks reasonable enough, but it is the slowest final quarter growth in over 10 years."

According to Saunders, "In a nutshell, the current problem for Amazon is that it spent most of the pandemic driving with its foot to the floor to keep up with demand, but as demand dropped back it did not apply the brakes fast enough. The net result is that it has veered off course and had a bit of a financial crash. Management has spent most of the past year trying to make repairs in the form of reining in spending, but the actions were not sufficient to save the quarter or the fiscal year."

In a tough, slowed-down economic environment, Amazon needs to be more "targeted with its growth ambitions," Saunders said.

"Since its inception, Amazon has had a culture of throwing dollars at many different things to see where they led and what they could learn," he said. "That approach worked well for a younger, fast-growth business. It works far less successfully for a more mature entity. In our view, management deserves credit for recognizing this and quickly responding. However, the shift requires a lot of care because Amazon needs to find a new balance between being ambitious and innovative and being more frugal with its spending, which will be very challenging."