Retail Giant Amazon Plans to Buy Whole Foods for $13.7 Billion

Xavier Trudeau
Juin 22, 2017

But online delivery of groceries has been tough to pull off. They say what's on their mind.

And Amazon has plenty to learn about bricks-and-mortar grocery. They really are. And one of my takeaways is that, by God, we're gonna become as customer-centric as Amazon.

But Mackey, at the Friday town hall, said, "Over time, there could be other formats that evolve that - that might - wouldn't be branded Whole Foods Market, potentially, wouldn't be our standards". We haven't heard anything from Amazon about whether this is true. But he said he thought Amazon would be able to help Whole Foods more quickly realize the changes it has already been pursuing, such as a loyalty program and its cost-cutting efforts. We just fell in love. "That's something that doesn't seem to right to me, actually".

"The older you get, the easier it gets when it comes to your door", said Merrill.

It appears that the Whole Foods deal is the beginning of the endgame for Amazon. I think we could've talked for 10 hours.

Nationwide, the retail grocery and supermarket business totaled almost $707 billion in revenue in 2016, according to U.S. Census data, and Amazon has made no secret of its intent to grab its share of that lucrative market. So there's lots of room to grow. That's a significant boost in numbers for the Seattle company, which now operates fewer than 100 distribution centers in the U.S. But it has been struggling to find a profitable model. Through AmazonFresh, Prime members in select cities can shop online for produce, everyday items, and favorites from their neighborhood shops and restaurants, and then choose to have them delivered or pick them up in a drive-through location.

"Whole Foods was late in realizing private label's opportunity because they were enjoying the growth of the organic market", said the Citigroup report "There is significant opportunity there for Amazon".

Now Bezos "is doing the same to grocery stores, with the biggest losers likely to be their vendors - manufacturers of consumer brands, particularly staples", Yardeni said in a note to clients. "It's a good company", she said. "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". Online ordering, possibly delivery, could be game-changers, according to Meyer.

That was feeling of Taylor Malooly, 19, a University of Texas student at Whole Foods in Austin, who said a Whole Foods delivery service would have to be fast if he were to try it.

Shoppers have plenty of options.

The US$13.7 Billion deal is the largest yet for Amazon, a whopping 70 times larger than its other 70 deals combined, and experts say that when Amazon arrives in Australia, it could happen here too.

They'll be dealing with "integrating it and really attacking what is the biggest retail market in the US, which is grocery", Blackledge said.

"We will be joining a company that's visionary", Mackey said. One problem facing the chain: Conventional supermarkets are stocking more natural and organic products at lower prices than Whole Foods, draining away some of its customers.

Another potential shakeup said to be coming is in inventory management. But Parikh added that activist investors have a stake in Whole Foods. Instacart, which operates in 69 markets, counts partners including Costco, Publix, Target and Wegman's.

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