What happens to Instacart in the Amazon-Whole Foods deal?
- Author: Zachary Reyes Jun 22, 2017,
Jun 22, 2017, 11:45
She's skeptical that groceries will go purely online and thinks it'll be more of a hybrid model, where people use a mix of online ordering, restaurants and traditional grocery stores. Meanwhile, the more than 460 Whole Foods stores in the U.S., Canada and the United Kingdom could be turned into distribution hubs - not just for delivering groceries but as pickup centers for online orders.
In the USA "this adds 440 refrigerated warehouses within 10 miles of probably 80% of the population", said Michael Pachter, an analyst for Wedbush Securities. This deal will put it on the map of the $700 billion grocery market.
On Friday, June 16, 2017, online retailer#Amazon announced its plans to purchase #Whole Foods.
It also is expected to hasten existing efforts by grocers to make shopping more smartphone-ready, sell more private label and specialty foods and overcome the hurdles of home-delivery of groceries.
Whole Foods is a favorite by health nuts and the average shopper alike.
Acquiring Whole Foods will provide Amazon more physical locations to experiment with, and eventually expand its retail business. The activist investor firm acquired a stake in the grocery chain and had been pressuring it to find a buyer after sales growth had stalled.
GoPro and Pandora continued their recent spate of losses, with GoPro shares falling 3.7 percent to $7.77, and Pandora giving up 4.3 percent to close at $6.99 a share. The same goes for Shipt, an Alabama-based grocery delivery service that's also a Whole Foods partner. That is the eighth Amazon bookstore now open around the US and more are expected in the future.
Adding groceries to its repertoire gets Amazon that much closer to being a one-stop destination for everything you buy. Whole Foods gives Amazon a tremendous amount of credibility around the quality of the food and the reputation they have with their customer base. These three have begun offering some of what Whole Foods offers, forcing the supermarket chain to cut prices. The website cited an opportunity for the company to buy another entity with the logistics expertise to fill that said gap.
"This might be an opportunity for consumers who have felt that Whole Foods is inaccessible", said Lauren Beitelspacher, a marketing professor at Babson College in MA.
PCC has also partnered with its competitor, offering delivery through Amazon Prime Now since April past year. The top 10 grocery retailers plus Amazon control less than half of the market, Blackledge says, and a patchwork of several hundred grocery chains, convenience stores, dollars stores as well as mom and pop stores make up the remainder.