Amazon's Whole Foods purchase will shake up the grocery business

Adjust Comment Print

"Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy", Jeff Bezos, Amazon founder and CEO, said in a press release.

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. It adds that it plans no job cuts as part of the deal. "But grocers have to respond and move faster now". That marks an 18 per cent premium to Whole Foods' closing price on Thursday.

But Whole Foods customers are loyal, and some shoppers are excited about Amazon's purchase. The technology, however, could free up employees to talk to customers about products, the same as in the company's brick-and-mortar bookstores, he says.

Madeline Hurley, a grocery analyst with IBIS World, an industry research company, said Amazon will likely revamp Whole Foods' internet presence. While both companies aren't headquartered here - check out Austin Inno for the deal's impact on Whole Foods' home base - the deal is certainly going to have an impact here and everywhere else across the country, if only due to their collective reach. The investment firm Jana Partners said in April that it had built up an ownership stake in Whole Foods because it saw ways to address its "chronic underperformance for shareholders".

Already, Amazon is one of the biggest online retailers known for attracting millions of shoppers to its website every month. In theory, the huge customer bases these Wal-Mart stores draw takes traffic away from smaller retailers.

Chinese insurer reportedly detained amid financial probe
The Financial Times said earlier that the 50-year-old chairman was barred from travelling outside the country. It claims to have over 30,000 employees globally and more than 800 billion yuan ($118 billion) in assets.

Meanwhile, in a letter to its customers, Whole Foods Market, Inc. The grocer will continue to operate stores under the Whole Foods Market brand and John Mackey will remain as its chief executive officer, the companies said.

The companies expect the deal to close by the end of 2017, subject to approval by Whole Foods Market's shareholders and regulators., Inc. (NASDAQ:AMZN) has struck a deal to acquire Whole Foods Market, Inc. Right now, Ahold's stock is down by almost 10%. Walmart and Target also took significant hits.

"This might be an opportunity for consumers who have felt that Whole Foods is inaccessible", said Lauren Beitelspacher, a marketing professor at Babson College in MA. Wholesaler Costco lost $5.2 billion, while discount store Target said sayonara to $3.5 billion.

On Friday, Wal-Mart said it would buy Bonobos, a popular internet apparel retailer; a year ago, it acquired Amazon competitor and appointed that company's chief executive, Marc Lore, to strengthen its e-commerce operation.