How major United States stock market indexes fared on Friday
- Author: Zachary Reyes Jun 17, 2017,
Jun 17, 2017, 15:40
John Mackey will maintain his position as CEO of Whole Foods Market and the health food chain's headquarters will remain in Austin, Texas. Whole Foods, founded in 1980, has about 460 stores, including nine in the United Kingdom where it has operated since 2004.
Defense contractor Booz Allen Hamilton tumbled after it said the Department of Justice is investigating its accounting practices and the way it charges the US government.
Amazon could also get a better picture of customers by marrying data from Amazon and Whole Foods' loyalty programs.
Amazon didn't decide to drop $13.7 billion to acquire Whole Foods on Market Friday to improve the struggling fancy food seller's performance within the traditional model. The acquisition price implies a trailing 12-month price-to-earnings multiple for Whole Foods of 31 times, versus a 14.4 average for the S&P 500 Food Retail Index. Studios sell content; Amazon can use content - and now Whole Foods - essentially as marketing for what it's really selling: Prime.
Vice President at Moody's Investors Service, Mickey Chadha said "supermarkets will now have to contend with not only competition with each other and non-traditional grocers like Wal-Mart Stores Inc and Target Corp, but with a retailer like Amazon which has the financial capacity to price aggressively".
"Amazon and Whole Foods are both quite good at creating brands of their own". Analysts say the Whole Foods footprint and distribution channel could theoretically make 5-minute deliveries a reality. 'Now, with Whole Foods, they're going to try to win [the grocery] category. It was widely reported that Jana was pressing Whole Foods to consider a sale. It also had been facing increased pressure from rivals offering more organic options. "And now Amazon has access to customers who may be open to home delivery".
Amazon's offer to purchase Whole Foods will have profound implications for workers at Amazon, Whole Foods, and on the entire working class.
Higher prices at Whole Foods has been a detractor for some shoppers - in fact, it has a nasty nickname of "Whole Paycheck", meaning that shopping there takes a chunk of your salary.
A Whole Food Market is shown in Indianapolis, Friday, June 16, 2017.
Carmen Clark, 37, a six-year employee at a store in Mount Pleasant, South Carolina, said some workers worry that Amazon-led automation could lead to job cuts. To challenge Amazon, Walmart has been engaged in an acquisition spree of e-commerce companies over the past year, culminating with a purchase also announced Friday of the online apparel company Bonobos for $310 million. Amazon is buying Whole Foods in a deal valued at about $13.7 billion, a strong move to expand its growing reach into groceries.
The deal is for Dollars 13.4 billion in cash and the remainder in debt. Amazon might be able to sell low-priced groceries as it makes its money from its cloud computing business and its huge online marketplace, and do to big grocery stores what it's done to sellers of goods like clothing and office supplies.