The online retail giant announced Friday, June 16, 2017 that is buying organic grocery chain Whole Foods for $13.7 billion in cash.
Armed with giant warehouses, shopper data, the latest technology and almost endless funds - and now with Whole Foods' hundreds of physical stores - Amazon is set to reshape a US$800 billion grocery market that is already changing rapidly. Amazon also offers grocery shipments elsewhere, but that's tough with perishable foods. Whole Foods is courting the discount shopper with its lower cost brand 365. Eleanor McCarthy, who said she lives "near Newburyport", has a son who works for Amazon in Los Angeles. Certainly, it would appear to Cantillon that Bezos sees the future as slightly more nuanced than the vista of couch-bound online shoppers ordering everything from fast food to films online.
Courtney Hiddeman and her family live right down the street from the Whole Foods "world headquarters" on Bowie Street in Austin. They don't wash your hair, but short of that.
"I don't know if they do deliveries", she said, referring to Whole Foods. It was widely reported that Jana was pressing Whole Foods to consider a sale. And the average size of Whole Foods' stores has crept up by 14% over the past five years, which theoretically gives Amazon more room to add other types of products or services, such as same-day pickup for goods sold online.
Just two years ago, Whole Foods CEO John Mackey told Bloomberg BusinessWeek that Amazon's foray into grocery delivery would be "Amazon's Waterloo". More significantly, it caused some $30 billion to disappear from Costco, Wal-Mart Stores, Kroger, Supervalu and other grocery vendors.
Beyonce and Jay Z welcome twins
The twins are finally here, say People and US Weekly in lieu of an official announcement from Beyoncé and Jay-Z. Beyonce cradled her protruding belly in the photo which broke a record for the most liked picture on Instagram.
"The conventional grocery store should feel threatened and incapable of responding", Pachter said. "That's more important than ever given Amazon just declared war on every supermarket and corner store in America".
In Whole Foods, it is acquiring a company that has recently come under pressure from investors for its lagging performance. With a $13.4 billion purchase, Amazon is stepping up its game and hoping to get an even stronger foothold in the retail market. Whole Foods shares were trading just above that level on Friday, as investors saw negligible regulatory risk to the deal closing.
While Whole Foods has struggled to expand, Amazon has been expanding its reach in goods, services, and entertainment. So Amazon's acquisition of the food seller significantly boosts its grocery capacity.
With Whole Foods, Amazon gets an established business that it can transform through its technology and supply network expertise. The company had sales of about $16 billion previous year.
The deal brings to a head a years-long battle brewing between Amazon and traditional retail powerhouses such as Walmart.
Comments