Amazon devours Whole Foods grocery chain for $13.7B, expanding AmazonFresh delivery avenue...
A blockbuster deal announced Friday morning will see e-commerce giant Amazon buy organic and all-natural food vendor Whole Foods in an all-cash deal -- and other retailers and grocers are seeing massive stock drops because of it.
Amazon had already said that Whole Foods stores will continue to operate under the same name, as a discrete division of the company. Whole Foods Chief Executive John Mackey is staying in place, as is the company's headquarters in Austin, Tex.
"Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy," Amazon founder and Chief Executive Jeff Bezos said in a statement. "Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades -- they're doing an amazing job and we want that to continue."
A report in December 2016 claimed that Amazon was planning on opening up more than 2,000 self-branded grocery stores. In September 2017, Whole Foods had 456 stores, and 87,000 employees.
The deal gives Whole Foods shareholders a 27 percent price premium, valuing the company at $42 a share. The deal is having repercussions throughout stock markets, with many grocery chains down 10 percent or more as a result. Walmart and Target are also seeing impacts, down 6.1 and 9.2 percent respectively at the time of this report.
"This partnership presents an opportunity to maximize value for Whole Foods Market's shareholders," said Mackey. "At the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers."
Amazon has been reticent to expand its AmazonFresh delivery grocery market, and the deal appears to be an easy way to expand this market by utilizing the Whole Foods infrastructure to do it. At present, Amazon Fresh services 18 metropolitan areas worldwide, and has 500,000 items available.
Amazon had already said that Whole Foods stores will continue to operate under the same name, as a discrete division of the company. Whole Foods Chief Executive John Mackey is staying in place, as is the company's headquarters in Austin, Tex.
"Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy," Amazon founder and Chief Executive Jeff Bezos said in a statement. "Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades -- they're doing an amazing job and we want that to continue."
A report in December 2016 claimed that Amazon was planning on opening up more than 2,000 self-branded grocery stores. In September 2017, Whole Foods had 456 stores, and 87,000 employees.
The deal gives Whole Foods shareholders a 27 percent price premium, valuing the company at $42 a share. The deal is having repercussions throughout stock markets, with many grocery chains down 10 percent or more as a result. Walmart and Target are also seeing impacts, down 6.1 and 9.2 percent respectively at the time of this report.
"This partnership presents an opportunity to maximize value for Whole Foods Market's shareholders," said Mackey. "At the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers."
Amazon has been reticent to expand its AmazonFresh delivery grocery market, and the deal appears to be an easy way to expand this market by utilizing the Whole Foods infrastructure to do it. At present, Amazon Fresh services 18 metropolitan areas worldwide, and has 500,000 items available.
Comments
Personally, I'm an Aldi's, Harris Teeter, and Wegmans man, myself. I have AmazonFresh delivery in my area, but just haven't used it.
It is easier in smaller businesses to have genuine customer service and interest, so I generally support that. Not that Whole Foods is small, but they just became a lot bigger and probably even more profit directed as more people will invest who care not about food but money.
its fashionable to bash Whole Foods prices. Yes, the prices scale up to absurd levels but the basics are priced competitively. I'd rather shop for basics at Whole Foods in a big beautiful space with happy staff than enter the dystopian nightmare of the regular supermarket across the street. We'll see if any changes by Amazon erase that advantage.
Huge news. Potential ramifications for all AMZN rivals, including Apple. Biggest point not mentioned so far:
If Amazon offers Whole Foods customers discounts only if they become Amazon Prime members [as AMZN does to customers at its brick bookstores], then Jim Bezos taps into much of Apple’s demographic base, giving them access to free Prime media, etc. Becomes a turf battle with Apple Services.
PS Surprised that Whole Foods founder (ex Congressional staffer) John Mackey sold to Amazon, as Whole Foods unusual in NOT tracking its consumers through loyalty cards.
Much remains to be seen. Wouldn't want to prejudge. To my pleasant surprise, Bezos ownership is partly responsible I believe for improved tenacity of the Washington Post.