Amazon-Whole Foods Marriage Could Disrupt Grocery Business (NASDAQ:AMZN)

Key Speakers At The 32nd Space Symposium
Jeff Bezos CEO and Founder of Amazon in Colorado Springs
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23 June, 2017

Amazon has turned malls upside down, but had left grocery stores unscathed.

Charlie O'Shea, a Moody's lead retail analyst, told the Associated Press news agency that the deal could be "transformative, not just for food retail, but for retail in general". He expects the retailer to keep the Whole Foods stores open and eventually even make grocery deliveries via drone.

On Friday, June 16, 2017, online retailer#Amazon announced its plans to purchase #Whole Foods.

Investors worry that Amazon, which has already won over hordes of shoppers of clothing, electronics and many other kinds of goods, wreaking havoc on department stores and other brick-and-mortar retailers, will do the same thing with groceries.

But Instacart is also a competitor to Amazon's growing grocery delivery service, AmazonFresh.

Two decades later, the Whole Foods deal shows that Bezos and retail chief Jeff Wilke are staying true to the company's values.

Some investors may be wondering if Amazon will disrupt grocery stores the way it upended the bookstore business.

Whole Foods has hundreds of locations all over the country. Right now, Ahold's stock is down by almost 10%. Walmart and Target also took significant hits.

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.

The company also has been testing sensors at a convenience store in Seattle to track items as shoppers put them into baskets or return them to the shelf.

While the news came as a surprise to most observers in both the technology and retail sectors today, it is apparently a move Amazon has been contemplating since at least last fall, when it first considered acquiring the organic food company. It remains to be seen if Google will look for more food store partners. The website cited an opportunity for the company to buy another entity with the logistics expertise to fill that said gap.

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". So, no - you won't be greeted by robots when you go inside a Whole Foods outlet. "This shows that online is going to be very dominant in the grocery business - and very quickly", said former Whole Foods executive Errol Schweizer.

Adrienne Anderson, at a Whole Foods in Savannah, Georgia, says she shops at Whole Foods nearly exclusively for meat and fresh produce "because of the quality and selection" and because fruits and vegetables are locally sourced.

Whole Foods, which has more than 460 stores in the United States, Britain and Canada, has a lot of brand power.


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