28 June, 2017
Its stores boasted longer lines despite the higher prices Whole Foods is known for.
And there's no shortage of speculation about the ways the company could innovate and leverage Whole Foods locations to further its interests. "And she said, 'That's insane.'" Mackey said, drawing guffaws from employees at a town hall meeting on Friday.
If Amazon wants to make a dent in the restaurant delivery business, its only choice at this point is to acquire Grubhub, Wedbush senior tech analyst Aaron Turner told CNBC on Tuesday.
While most corporate marriages end in relative failure, Amazon's $13.7 billion acquisition of Whole Foods could very well be the birth of a power player in the grocery space.
Peter Arroyo, manager of Gristedes, had more on his mind regarding the Amazon-Whole Foods deal, which he predicted will "screw up the industry in all aspects", said Arroyo.
In a note to clients, the bank's analysts said: "We could argue that the impact of Amazon will be very long term, that it might not be successful in its venture or that the same strategy will not be exported to the United Kingdom - and we might be right".
In a town meeting held the day the deal was announced, Mackey shed light on how the deal between Whole Foods Market and the world's largest retailer, Amazon, actually went down. Whole Foods recorded ~$16B in sales during 2016. "We're gonna become as customer-centric as Amazon", he said. We just fell in love. The company spent over four years planning the cashier-less market and despite a few technical difficulties, an 1,800 square foot prototype is now open to Amazon employees in downtown Seattle.
It's gonna be an awesome thing for our customers, the type of things that we're gonna be able to do.
And while New York City's retail players stressed they didn't have a crystal ball into Jeff Bezos' thinking, they said it's probably a little bit of both - Amazon is likely to apply its omnichannel expertise to the grocer while using its enviably-located stores to expand its own brick-and-mortar operations.
"Even if they did compete. you'd have to look at the presence of (other grocery chains)", said Abbott, who argued that many Whole Foods stores are in close proximity to other grocery stores, which means antitrust enforcers might be satisfied there was adequate competition. Whole Foods has a corporate culture that prizes inclusive decision-making, such as allowing workers to vote on benefits every three years and disclosing executive pay.
"I think it helps their distribution network".
Morgan Stanley analysts have also written in a report that Amazon's acquisition of Whole Foods "creates an entry point to drug delivery" and provides the necessary real estate.
The Whole Foods chief said Amazon's technology will help the grocer transform from "class dunce" into "valedictorian". The retailer said it will keep 465 physical locations in the United Kingdom and North America.
Mackey added that there would be executive changes at Whole Foods but that he didn't think they would be "forced on us" by Amazon. Shoppers could pick up their purchases at a Whole Foods store near them the same way they're doing under the AmazonFresh Pickup program.
