Amazon to buy Whole Foods for $13.7 billion

Adjust Comment Print

Amazon is making a bold expansion into physical stores with the $13.7 billion deal to buy Whole Foods, setting the stage for radical retail experiments that could revolutionize how people buy groceries and everything else.

Pressure from activist investors got so high that Mackey told Texas Monthly magazine recently that "they're greedy bastards, and they're putting a bunch of propaganda out there, trying to destroy my reputation and the reputation of Whole Foods, because it's in their self-interest to do so".

"The conventional grocery store should feel threatened and incapable of responding", Wedbush Securities analyst Michael Pachter said.

The deal has the possibility to be "transformative", Moody's lead retail analyst Charlie O'Shea said in a note, "not just for food retail, but for retail in general".

Wal-Mart was just one of the many retailers whose stocks were impacted by the news that Amazon is acquiring Whole Foods. The same goes for Shipt, an Alabama-based grocery delivery service that's also a Whole Foods partner.

Amazon, meanwhile, has been expanding its reach in goods, services, and entertainment. However, this should be regarded as mere formality as the deal is expected to go ahead without any hitch. It also had been facing increased pressure from rivals, including European grocery chain Lidl, which is planning to enter the East Coast market, along with Aldi and Trader Joe's. Whole Foods itself had launched an offshoot chain named after its "365" private label brand in a nod to the popularity of no-frills chains.

Completion of Amazon's purchase is subject to approval by Whole Foods' shareholders, regulatory OKs and other closing conditions. Target tumbled by 10 percent and Walmart was down by 6 percent.

Amazon could try to cut operational costs at Whole Foods by using the same types of robots that already move inventory around at its e-commerce fulfillment centers.

More news: Chinese police detain chairman of Anbang, which sought ties with Jared Kushner
More news: Doctors: Scalise remains critical, but 'excellent recovery' possible
More news: Wounded US lawmaker 'in some trouble', Trump says

Amazon is considering extending the cost-cutting effort with the no-checkout technology it's developing at its Seattle convenience store, "AmazonGo", according to the person familiar with the matter, who asked not to be named because the plans are private. Using a range of sensors, the Amazon app detects what a customer grabs in the store and bills it to his account if he doesn't return it.

Here's a look at some of the big moves in the stock market following news of Amazon's acquisition of Whole Foods Market.

John Mackey will remain CEO of the company. In an email to customers, the company said it planned to maintain the same standards under Amazon, including bans on artificial flavors and colors.

The Whole Food purchase price topped $13.7 billion dollars in cash.

Kyle Bunch is with R/GA, a marketing, advertising and consulting firm right across from the Whole Foods headquarters. Hetu said Amazon could make pertinent offers to attract shoppers of one but not the other, or get shoppers of both to buy more. 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.

The grocer will continue to operate stores under the Whole Foods Market brand, the companies said.

"Instead of deliver to my home, why not just come down here?" They primarily want us to sell the company.

Comments