Amazon to Acquire Whole Foods Market for $13.7 Billion
- Author: Zachary Reyes Jun 21, 2017,
Jun 21, 2017, 13:18
Since Whole Foods is a publicly traded company it could be scuttled if another bidder decides to offer a lot more money for the grocery chain.
Amazon.com, the online retail giant, made a major move into the brick and mortar space Friday, announcing that it would buy Whole Foods Market in a deal valued at $13.7 billion. According to the deal worth US$13.7 billion (£10.7 billion) the retail grocery store chain is to keep the Whole Foods Market brand name and John Mackey is reportedly to remain its CEO.
Walmart, which has the largest share of the USA food market, has been working on lowering prices, while Target has been struggling to turn around its grocery business. On Friday, WalMart announced it is buying men's online clothing retailer Bonobos for $310 million. He says having this powerful partner will put Whole Foods far ahead of its competitors. It also had been facing increased pressure from rivals offering more organic options.
The companies expect the deal to close by the end of 2017, subject to approval by Whole Foods Market's shareholders and regulators.
And because customers can buy foods and bulk items like toilet paper from a single retailer, discount retailers such as Costco, Target and Walmart should feel threatened, too. That is the eighth Amazon bookstore now open around the US and more are expected in the future. The shopper's Amazon account gets automatically charged.
"However they're going to use Whole Foods in their portfolio, you're going to see it here in Dallas", Cox said.
Both companies have a significant presence in Texas, making the Lone Star State a good place to test synergy, according to one marketing expert. However, Whole Foods does not have access to Instacart's financial numbers and analytics.
"Amazon is an innovative company and we are excited about our partnership".
Joking aside, the purchase will mean a serious disruption: rather than a brick-and-mortar store getting into e-commerce, in this deal an online behemoth will be moving onto Main Street, and in one fell swoop acquiring more than 450 stores in the US, Canada and Britain.
Instacart and Whole Foods did not immediately respond to request for comment.
Meanwhile, in a letter to its customers, Whole Foods Market, Inc. The Journal said the acquisition "could make Amazon an overnight heavyweight in the all-important grocery business..."
This latest deal "would worsen the already severe damage that Amazon is doing to America's competitive, open market system", Lynn said.
And shoppers are a picky bunch, saying they would be looking for the best prices, good quality and convenience when it comes to online food delivery.
For Amazon, the Whole Foods acquisition does more than just leapfrog over the technical difficulties it has had in implementing its grocery plans. Many of them, including local Walmart locations in Springfield, offer curbside pickup, and other stores offer delivery services.
But home delivery of goods has proven to be a big hurdle due to costs and the difficulty of selling meats and other perishables. "I'm shopping here anyways", shopper Alina Gura said at a Whole Foods in West Hartford, Connecticut.