26 June, 2017
And much of the battle is expected to take place online, on Amazon's home turf.
The Whole Foods store at the foot of the Oakland Hills is an always busy success story even as some customers expressed a range of views when asked about Friday's bombshell announcement that online giant Amazon is snapping up the specialty grocer.
"The ramifications for all of retail are seismic - not just retailers that sell grocery, but for everyone", Chuck Grom of Gordon Haskett said.
Lucy: If the deal closes and isn't killed by regulators, a couple of Boston-based entities could win big.
Shares in many of Amazon and Whole Foods' competitors were down in trading today, as investors contemplated the potential ramifications from the tie-up.
Since its founding 23 years ago, Amazon.com has upended the business of selling books, music and just about everything else we consume - except food.
Amazon announced Friday that it will pay $42 a share for Whole Foods, which was founded in 1978 in Austin, Texas, and is still based there.
Amazon will be able to use automation and data analysis to draw more customers to stores while helping Whole Foods cut costs - and perhaps prices - and better tailor its offerings to customers.
They said it's too soon to tell what sort of impact this will have on Wal-Mart, but they think "should Amazon choose to rapidly grow 365 [Whole Foods' lower-priced brand] and/or acquire other players... such development would bode poorly for Wal-Mart".
"I wish I could, but I don't know how to use the internet", she said. Whole Foods, a pioneer in natural and organic products, has 456 stores, which young, high-end shoppers flock to.
Amazon's almost $14 billion deal for Whole Foods will have huge ramifications for the biggest players in the grocery business.
"This partnership presents an opportunity to maximize value for Whole Foods Market's shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers", Mackey said. He expects the retailer to keep the Whole Foods stores open and eventually even make grocery deliveries via drone.
The acquisition stands as a huge boost for Amazon's strategy to integrate the brick-and-mortar model into its business. (NASDAQ:WFM) in a deal valued at around $13.7 billion.
The S&P 500 market capitalization loss for just 20 stocks in the retail and food sector was $37.7 billion by Friday afternoon, according to CNBC. More recently, it's stepped up those efforts by expanding its Amazon Fresh delivery program, launching Amazon Fresh Pickup, and testing its cashierless Amazon Go store. It has expanded from a book seller into a merchant of almost all consumer products, as well as producing videos. Amazon also offers grocery shipments elsewhere, but that's tough with perishable foods.
Neuberger portfolio manager Charles Kantor said Amazon's bid could be topped by grocery companies anxious about new competition.
