Amazon shakes up grocery aisles with $13.7b Whole Foods deal

The deal, expected to close in the second half of this year, gives Amazon – which has been experimenting with various store concepts to establish itself as a food purveyor – an instant expanse of 460 high-end stores across the US, in Canada and in the United Kingdom.But it was Whole Foods that fell behind as shoppers found alternatives to the organic and natural foods it helped popularize since its founding in 1978.The buy marks Amazon’s largest acquisition to-date.The acquisition also represents the single largest deal Amazon has made to date. He’s got professional respect for Amazon for how efficiently and successfully it runs its business.While their merger is subject to approval by Whole Foods’ shareholders, regulatory approvals and other customary closing conditions, the two parties expect to close the deal during the second half of 2017.Amazon’s announcement of buying Whole Foods on Friday could eventually change the grocery industry.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.”This is a game changer”, Zachary Fadem, an analyst at Wells Fargo & Co, said.Although Amazon has been dabbling in the fresh produce arena in certain American markets recently, the acquisition of Whole Foods has upset the traditional groceries industry and also impacted food supply companies. “We are seeing very early signs here across AMZN Bookstores and the Amazon Go store in Seattle”, Anmuth wrote in a note obtained by CNBC. To do that, it’s considering selling fewer items and integrating tools from the cashierless store Amazon Go into checkout stations across Whole Foods. More significantly, it caused some $30 billion to disappear from Costco, Wal-Mart Stores, Kroger, Supervalu and other grocery vendors. Whole Foods will keep operating stores under its name.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. But he says he was going to ask a Whole Foods cashier about the Amazon deal and then hesitated, unsure whether the workers were as excited.But the many options confused customers, and a major gauntlet remained: Fresh food.Amazon introduced AmazonFresh in 2007, a service that for a fee delivers groceries to customers’ homes but that has failed to make a wide impact. 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. But today’s development will bring it more than 430 retail locations across the country, a substantial base from which it can expand its empire into the physical realm.”From the moment Jana had announced its stake in Whole onslaught of attention from media and banks ensued”, Whole Foods’ chief executive, John Mackey, said in a Texas Monthly article this month.Amazon, meanwhile, has been expanding its reach in goods, services, and entertainment. “Meat will still come from animals raised with no-added growth hormones, ever”, the company said.”The conventional grocery store should feel threatened and incapable of responding”, Pachter said. Target and Aldi have also been introducing more discounts to compete with chains such as Wal-Mart, which are known for low prices. “They’re not really competitors”.