25 June, 2017
Amazon.com, Inc., the world's largest Internet-based retailer, said Friday it will acquire Whole Foods Market Inc., a supermarket chain featuring foods without artificial preservatives, colors, flavors, sweeteners and hydrogenated fats, at a total cost estimated to be 13.7 billion US dollars. The parties expect to close the transaction during the second half of 2017.
"We want to assure you that Amazon shares Whole Foods Market's deep commitment to quality and customer service".
Amazon could be sparking major changes in the food industry with its recent acquisition of Whole Foods for $13.7 billion, deemed a major capture of brick-and-mortar stores to further expand its retail business.
Amazon has sought to both enter the grocery market with its Fresh grocery delivery service and beef up a more traditional physical retail presence with a small fleet of bookstores and mall kiosks along with two grocery stores and a convenience store in Seattle.
Amazon has agreed to pay $42 per share in cash for Whole Foods, a 27 percent premium on the Austin, Texas-based grocer's closing share price on Thursday.
With Whole Foods, Amazon gets an established business that it can transform through its technology and supply network expertise.
"Fresh foods are the final frontier for Amazon", Portalatin said.
Since Whole Foods is a publicly traded company it could be scuttled if another bidder decides to offer a lot more money for the grocery chain.
Amazon didn't detail its plans for the chain, but the deal rocked the retail sector.
For now, though, Whole Foods cashiers and other employees can take a sigh of relief. "That is the reality today at Amazon, and it will no doubt become the reality at Whole Foods", said UFCW President Marc Perrone in an email.
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. Whole Foods, a pioneer in natural and organic products, has 456 stores, which young, high-end shoppers flock to.
In the short-term, said von Massow, it's unlikely Amazon will steal customers from other Canadian grocers. On Friday, WalMart announced it is buying men's online clothing retailer Bonobos for $310 million. Whole Foods will keep operating stores under its name.
The purveyor of natural and organic foods suffered gave back $4.36, or 11 percent, to $35.39. The items are logged electronically and applied to the customer's account, using an app on the customer's smartphone. However, Whole Foods does not have access to Instacart's financial numbers and analytics.
Amazon's almost $14 billion deal for Whole Foods will have huge ramifications for the biggest players in the grocery business.
