Amazon shakes up grocery aisles with $13.7 billion Whole Foods deal

Competition: Consumer groups are challenging Amazon's buying Whole Foods on antitrust grounds.

"This partnership presents an opportunity to maximize value for Whole Foods Market's shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers", Mackey said. But Amazon is also picking up Whole Foods' stake in Instacart, a grocery-delivery startup valued at $3.4 billion, whose founder and chief executive got his start at Amazon. In February 2016, the two signed a five-year agreement to make Instacart the exclusive delivery partner of Whole Foods' perishable business.

The company intends to apply the latest in artificial intelligence technology to refine and simplify the movement of food from the farm, through processing plants, and finally to retail outlets. Amazon and Whole Foods are both climbing, and energy companies are rising as the price of oil moves higher.

■Supervalu: The grocery store operator lost 54 cents, or 14.4 percent, to $3.22.

Some analysts on Wall Street see the acquisition as the online retailer's big entry into the food business.

The deal comes a month after Whole Foods announced a cost-cutting plan and board shake-up that ousted chairman John Elstrott, an LSU graduate who later taught at Tulane University in New Orleans and had been with the company since its beginnings. Will online retailers such as Amazon change the way people shop, permanently?

It's also been testing automation technology at a Seattle convenience store that's now open only to Amazon employees. The shopper's Amazon account gets automatically charged. The stocks of Hershey, Campbell Soup and Conagra all slumped 2% or more.

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

- Sysco. The food distributor sank $1.15, or 1.2 percent, to $54.38. It also gives Amazon, a massive brick-and-mortar presence through more than 300 Whole Foods stores across the country.

Canadians have few options for grocery delivery with a small number of companies like Grocery Gateway and a few large chains offering the service in limited locations.

THE QUOTE: It's rare for a single deal to have a big effect on the broader stock market, but the deal between Amazon and Whole Foods did.

"It gives them a first step in Canada", said Michael von Massow, an associate professor at the University of Guelph, adding Amazon has shown it's committed to entering the food business.

The broad market reinforced the idea that a rival bid may be coming as the stock surged above Amazon's offer on Friday afternoon. Its headquarters will also stay in Austin, Texas, where it has called home since 1980.

Whole Foods has been a staple chain in the growing organic food market.

Instacart has raised nearly $700 million from investors, according to Crunchbase, most recently closing a $400 million financing round that valued the company at $3.4 billion.

  • Zachary Reyes