Amazon Purchase of Whole Foods Could Transform Grocery Delivery Business

Amazon Purchase of Whole Foods Could Transform Grocery Delivery Business

This deal will put it on the map of the $700 billion grocery market.

Inc. will pay $42 per share for Whole Foods Market Inc., including debt.

Shares of Amazon were trading at $988.52 in pre-market trading, a 2.53% jump, while Whole Foods shares were down 6.74% at $33.06.

Perhaps the most tantalising aspect of this purchase is whether Amazon might make a similar move here in the United Kingdom and snap up a chain of supermarkets to further cement its toe-hold in the grocery market.

Amazon is paying $42 per share for Whole Foods, which is a 27 percent premium from Thursday's night close.

Hauptman said millenials will likely change how food stores market and sell their products. In the first quarter this year, food-and-drink sales at American brick-and-mortar stores were down by nearly $3 billion even as grocery trips rose, according to market research firm Nielsen.

"We love Amazon, and we love Whole Foods".

When Amazon made a decision to approach Whole Foods last month, it picked Goldman for advice. While both companies aren't headquartered here - check out Austin Inno for the deal's impact on Whole Foods' home base - the deal is certainly going to have an impact here and everywhere else across the country, if only due to their collective reach.

Amazon has been eyeing stores that could allow traditional in-store purchases, online ordering with on-site pickup and home delivery, using the stores' warehouses as distribution points.




Despite Amazon's reputation for harnessing technology, a prototype store inside its corporate office in Seattle, called Amazon Go, which uses sensors and tech-savvy cameras to detect shoppers' selections and then charge their Amazon accounts, has rolled out more slowly than planned, a person familiar with the matter said.

Ryne Misso of the research firm Market Track said a customer who buys fresh fruit regularly at Whole Foods might be offered a deal on blenders and serving bowls.

John Mackey will maintain his position as CEO of Whole Foods Market and the health food chain's headquarters will remain in Austin, Texas. Whole Foods has seen its sales slump and recently announced a board shake-up and cost-cutting plan amid pressure from activist investor Jana Partners.

"The entry of the king of web retail into the food space has to rattle the other companies", said Brad McMillan, chief investment officer at Commonwealth Financial Network.

At least one local shopper at the Andover Whole Foods store had a much different perspective on the deal.

Amazon's deal to purchase Whole Foods was big.

Amazon is a beast in the world of online retailers. It has expanded from a book seller into a merchant of almost all consumer products, as well as producing videos.

SELYUKH: Bernstein is actually a huge fan of both Whole Foods and Amazon. But its stance could attract rival grocers to partner with Instacart in a broader bid to resist Whole Foods' new corporate resources. Earlier this week rumors were swelling that Amazon had its sights on acquiring messaging technology company Slack, turns out it was Whole Foods that would be first.

"Amazon is known to drive down prices and make the shopping experience more efficient", Wu said. Or someone who buys granola bars monthly from Whole Foods and paper towels every other week from Amazon might be offered the items in a single shipment, delivered to the door.

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