Shoppers may see big changes after Amazon buys Whole Foods

5 Things to Know About the Amazon Whole Foods Deal and the Future of Grocery Delivery
UK supermarket shares are recovering after Friday's Wholefoods shock
Author

19 June, 2017

Whole Foods will join AmazonFresh for groceries, Amazon Prime for TV shows and movies, Kindle for e-books, Audible for podcasts and audiobooks, Echo to rival smart assistants like Apple's Siri, and IMDb for movie reviews, among many other subsidiary companies.

Amazon's purchase of Whole Foods is a wake-up call for all grocery stores, says a Purdue University retail management expert."It is hard to overstate the impact that this is going to have in the grocery industry", says Richard Feinberg, professor of consumer science.

As Amazon moves into the grocery business with its $13.7 billion purchase of Whole Foods Market, the online retailer might meet resistance from some dedicated shoppers reluctant to buy food on the internet. "Whole Foods Market has been satisfying, delighting and nourishing customers for almost four decades - they're doing a wonderful job and we want that to continue".

The grocer will continue to operate stores under the Whole Foods Market brand, the companies said. With Whole Foods, Amazon is getting 456 brick-and-mortar stores in North America and Britain.

That, in turn, could help Amazon do better with pricing and promotions, branding and the overall store experience, said Robert Hetu, a retail analyst at Gartner. He's got professional respect for Amazon for how efficiently and successfully it runs its business. Those stores would solve much of Amazon's "last-mile" delivery challenge for fresh groceries - perhaps the top reason it hasn't made a dent in the grocery shopping of the 60 percent of millennials who buy other items from Amazon, he said.

The Amazon Go pilot store allows customers to choose items and then pay the bill automatically by just walking out of the store, all without going to a cash register.

Following the announcement of Amazon's plan to purchase Whole Foods Market, Inc.

UK supermarket shares are recovering after Friday's Wholefoods shock
Amazon pays £10.7 billion for grocery chain

While Whole Foods has struggled to expand, Amazon has been expanding its reach in goods, services, and entertainment.

Inside the stores, Whole Foods customers could see big changes, including easier checkouts.

"Amazon will reduce prices and change the assortment of products carried in Whole Foods stores to attract a larger customer base", said Ladd.

Alina Gura of Newington who was visiting the Whole Foods store with her almost two-year-old daughter, said she appreciates the quality of the food, particularly its organic products.

When Amazon was founded more than two decades ago, the internet was still in its infancy - but Jeff Bezos, the company's founder, had little doubt it was where the future of retail would be built. It was recently granted a patent for technology that would block shoppers from comparing prices using their mobile devices while they are in stores.

The Whole Foods deal is expected to close in the second half of 2017, pending shareholder and regulatory approvals. Whole Foods' headquarters will still be in Austin.


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