While many of Whole Foods stores are not now setup for drive-in and pickup, adding that capability would create big synergies with Amazon's e-commerce business by reducing last-mile delivery costs, says a Citigroup report published on Tuesday. Chief Executive Officer John Mackey, who agreed to sell the company to Amazon.com Inc. last week, said he was first set up with the e-commerce giant on a "blind date" about six weeks ago and fell in love after conversing for hours.
In this May 3, 2017, photo, people stand outside a Whole Foods Market in Upper Saint Clair, Pa. Amazons planned $13.7 billion acquisition of Whole Foods signals a massive bet that people will opt more for the convenience of online orders and delivery or in-store pickup, putting even more pressure on the already highly competitive industry.
Can Amazon, the company that persuaded people to buy ever more items online, win enough of them over to having their fresh groceries arrive in an Amazon box? The filing contained a transcript of a town hall meeting for Whole Foods employees.
He also said there will be leadership changes at the company.
Amazon is feared to be planning a bloodbath at Whole Foods. Still, much is unknown about how the Amazon takeover will impact Whole Foods, the grocery industry, and grocery shoppers in general.
Mackey expects Whole Foods to adopt the Amazon mantra focused on long-term growth and a better customer experience rather than concerns for short-term profits that please investors. Meanwhile, competitors like Wal-Mart, Kroger, and Supervalu went down 7%, 14.5%, and 17% respectively.
"We're gonna evolve", Mackey said.
"Like an old traditional marriage, where there are all kinds of rules and chaperones, we can't consummate the marriage until we're officially hooked up", he said.
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"I think the most important aspect of the purchase is that it gives Amazon 440 refrigerated distribution centers in the USA and probably puts their distribution presence within 10 miles of 80% of the population and within 90% of the wealthy population", he wrote in an email to CNBC.
"I dreamed that we merged with Amazon. This is not a Tinder relationship". In fact, the footprints of Amazon and Whole Foods are strikingly similar in many respects. Whole Foods is also among its partners, though the fate of their five-year contract may now be up in the air.
Whole Foods used to be one of the leaders in organic and natural foods, but other chains have increased the availability of those products.
Morgan Stanley analysts have also written in a report that Amazon's acquisition of Whole Foods "creates an entry point to drug delivery" and provides the necessary real estate.
Amazon has left cultures intact at other companies it purchased.
USA Today business reporter Zlati Meyer said the deal could combine two giant companies that could disrupt the market, but in a way that could benefit consumers: the competition could force other grocery stores to lower prices.
A source familiar with the matter say Amazon may roll out some (possibly extreme) cost-cutting measures to lower prices across the board at Whole Foods.