Amazon Charts Future of Food Shopping with Whole Foods Deal

Amazon buying Whole Foods in bold move into brick and mortar
Amazon buying Whole Foods in bold move into brick and mortar
Author

24 June, 2017

He said the deal allows Amazon to quickly build up its business in groceries through buying a well-regarded brand.

Online retailer Amazon surprised the tech world - and just about everyone - today with the announcement that it has reached an agreement to acquire the high-end grocery store chain Whole Foods Market for $13.7 billion in a cash and debt deal.

"Retweet if you've also spent $13 billion at Whole Foods", quipped the comedian Chelsea Handler.

Only about 2% of about $600 billion in annual grocery sales are made online, according to Daphne Carmeli, CEO of Deliv, which handles same-day delivery for more than 4,000 retailers, including grocers.

Online delivery of groceries so far has been tough for any company to pull off because of customers' concerns about the quality of meat and produce, Wedbush Securities analyst Michael Pachter said. So, no - you won't be greeted by robots when you go inside a Whole Foods outlet. John Mackey will be retained as the company's CEO and its headquarters will remain in Austin, Texas where it has always been.

Whole Foods whose fleet of stores now numbers more than 430 locations has found it hard to attract more mainstream consumers as Walmart and other large chains have stepped up their sales of natural and organic products.

"This is an natural disaster rattling through the grocery sector as well as the retail world".

The buy marks Amazon's largest acquisition to-date.

Amazon could also get a better picture of customers by marrying data from Amazon and Whole Foods' loyalty programs.

Whole Foods recently overhauled its board and redoubled cost-cutting efforts, seeking to change a high-price image that has tagged it with the nickname "Whole Paycheck".

They're coming down, analysts say.

Ginny Byrne of Plainville said she uses Amazon, finding the shopping to be easy.

So your quinoa and goat cheese might get a little cheaper.

Whole Foods did not embrace Jana's suggestions.

Will this change how I buy my groceries?

Despite Amazon's reputation for harnessing technology, a prototype store inside its corporate office in Seattle, called Amazon Go, which uses sensors and tech-savvy cameras to detect shoppers' selections and then charge their Amazon accounts, has rolled out more slowly than planned, a person familiar with the matter said.

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.

That model could expand, Cohen said. Jeff Bezos's driving principle is to focus on basic customer retail needs: "superior selection, convenience though speed of delivery, and low price".

New Seasons in Northwest Portland has a special set of shelves where Amazon Prime pickers and packers place bags of groceries ready to be delivered locally in one hour, via Amazon Prime Now. And Alexa, the Amazon voice assistant program, will certainly be involved somehow.


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