Amazon to buy upmarket grocer Whole Foods for $13.7 billion

U.S. stocks ended little changed on Friday, though’s deal to buy upscale grocer Whole Foods Market pressured a wide range of companies including Wal-Mart, while the dollar and U.S. Treasury yields dipped after disappointing economic data. On Wall Street, grocery stocks plunged on the news of the Whole Foods takeover deal.’Now, with Whole Foods, they’re going to try to win [the grocery] category. For consumers, the deal puts Amazon’s pricing obsession to work on a grocer struggling with its “whole paycheck” reputation.Industry experts expect that to change rapidly.The post Amazon-Whole Foods Marriage Could Disrupt Grocery Business (NASDAQ:AMZN) appeared first on Market Exclusive. The deal is expected to close later this year. Whole Foods’ 440 stores tend to be in dense urban areas-6% of all American households are less than a mile from the stores’ coconut water, grass-fed beef, and extensive offerings of flavored tempeh. “They won’t look like stores in 5 years time, but they will be in those locations”. Amazon is known for replacing stores with web pages and workers with algorithms.Quidsi Inc.: The November 2010 purchase of Quidsi-the owner of and $545 million pushed Amazon deeper into selling consumer goods such as paper towels and toilet paper.Mark Huson, a director in West Monroe’s mergers and acquisitions practice in Seattle, had a similar take.The move solidifies Amazon’s longer-term expansion into groceries, which it has flirted with for years.However, Amazon’s private labels haven’t yet extended to grocery or CPG products.Amazon has been looking at stores that could allow traditional in-store purchase, online ordering with on-site pickup, and home delivery, using the store’s warehouse as a distribution point. It announced Friday that it’s buying online men’s clothing retailer Bonobos for $310 million, following a string of online acquisitions including ModCloth and Moosejaw.”The conventional grocery store should feel threatened and incapable of responding”, Pachter said.Several workers expressed relief and happiness about the planned sale, which came as Whole Foods faced pressure from hedge fund investor Jana Partners to improve results. It has more than 400 stores in south of the border.Amazon’s philosophy has been hard on many of its retail competitors, who have closed their doors in part because of online competition.■Kroger: The grocery store chain declined $2.27, or 9.2 percent, to $22.29.CO: What does it mean for people in smaller centres, in rural communities, where they have a great of difficulty getting access to retail like this? Many of them have started trying to sell more groceries in the last few years to try to capitalize on shoppers’ yen for fresher, more natural food. As we’ve done in the past, we will evolve our business to deliver what our customers want and need today and into the future.Huson thinks for now, Kroger and Safeway have things well in hand.We don’t yet know whether CEO Jeff Bezos will turn every Whole Foods into one of those creepy Amazon stores with no people.The Food Marketing Institute, a trade group that represents food retailers, says the average grocery store makes a net profit margin of 1.7 percent. “We believe it presents an incredible opportunity to take Whole Foods Market’s mission and goal to new levels and will create significant value for our stakeholders – including you, our most loyal customers”.