Amazon Buys Whole Foods Market at Whooping US$13.7 billion
- Author: Zachary Reyes Jun 17, 2017,
Jun 17, 2017, 3:40
In April, activist investor Jana Partners announced it had bought almost 9 percent of Whole Foods' stock and was reportedly hoping the grocer would make changes to boost its value. Amazon shares gained 3.2 per cent to $1317.
Today Amazon confirmed that it intends to acquire grocery chain Whole Foods. "Amazon sees that industry changing significantly - and they see that people don't necessarily go to the grocery store anymore".
The grocery chain, known for its organic options, 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.
With an inventory originally limited to books, Amazon's business has expanded its reach over the decades to include almost every consumer good that can be shipped. The Seattle-based company was recently granted a patent for technology that would block shoppers from comparing prices from their mobile devices while they're in stores.
Amazon has not disclosed if it is going to be launching physical stores for the sole goal of selling perishable goods, but it looks like we will get to know about this in the near future. All 465 Whole Food stores worldwide will remain open, for now-though if you've been to Austin's flagship store at 525 N Lamar Blvd, you know it's the best one.
Whole Foods, which will keep operating stores under its name, said in an email to customers, that it will maintain the same standards under Amazon, including bans on artificial flavors and colors and antibiotics in hens producing its eggs. Its stock peaked in 2013 at $86.39. This year, the company that has done more than any other to wreck the brick-and-mortar retail industry has been opening uniquely designed physical stores.
Small-company stocks fell more than the rest of the market.
Whole Foods experimented with many ways to attract and retain investors, including lowering prices. Whole Foods has been struggling with declining sales in recent years and saw its stock price lose half its value since 2013, the Wall Street Journal reported.