Amazon To Acquire Whole Foods Market For $13.7 Billion

FactSet Market Watch

Stanford University Marketing professor Wesley Hartmann said quality may not slip if the takeover comes to fruition because Amazon is incredibly efficient, while industry analysts have said Whole Foods is not.

A Whole Foods Market purchase awaits placement in a vehicle trunk, outside the Jackson, Miss., store Friday, June 16, 2017.

Amazon is making a bold expansion into physical stores with a $13.7bn deal to buy U.S. grocery chain, Whole Foods.

"That (Whole Foods 365) may become a big problem for Wal-Mart", Grant said.

But in the hands of Amazon it would be a potent weapon against archrival Wal-Mart, the world's largest retailer, which dominates the grocery world and has been stepping up its e-commerce. But online delivery of groceries has been tough to pull off. It's unclear how that arrangement will be affected by the Amazon acquisition should it go through.

For traditional grocers, like Kroger, this purchase makes the market even more price-competitive, she added. It announced Friday that it's buying online men's clothing retailer Bonobos for $310 million in cash, following a string of online acquisitions including ModCloth and Moosejaw. Earlier this year, Oppenheimer valued Whole Foods in the mid $40-range in a possible buyout. "It's exciting to see some more substantial moves". "It's just curious, isn't it, that Amazon has offered so many things online".

About 450: Number of Whole Foods stores across the country.

The merger offers a test of whether Amazon, which has generally built its business on low prices, can successfully integrate into the mainstream a grocer known for premium service and higher prices.

That's in part because most shoppers prefer buying groceries, and especially fresh foods, in person.


"This is an natural disaster rattling through the grocery sector as well as the retail world", said Mark Hamrick, senior economic analyst for Bankrate.com.

Take the restaurant sector, where customer traffic is flat, digital orders are up 45 percent over the last two years. So there's lots of room to grow.

Amazon has been looking at shop layouts that could allow traditional in-store purchase, online ordering with on-site pickup, and home delivery, using store warehouse space as a distribution point, Ladd said.

Many deals don't receive an appropriate level of regulatory scrutiny. "People don't know what they're having for dinner when they leave the office at the end of the day and don't have it in the refrigerator".

Kyle Bunch is with R/GA, a marketing, advertising and consulting firm right across from the Whole Foods headquarters. "If there ever was a time crunch, I'd consider it", he said. For customers, this could mean better prices and delivery options. Now it's trying to replicate that success in the grocery business. The company thinks it will have more luck rallying stores around the Amazon factor going forward.

A discount for Prime members? It's probably the biggest story in the past month, if not the whole year.

We ran into her making a grocery run - a trip she makes quite often.

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