fbpx
HomeNEWSAmazon buys Whole Foods

Amazon buys Whole Foods

Two of the most well-known names in American retail have come together as Amazon buys out Whole Foods supermarket for $USD13.7 billion.

Two of the most well-known names in American retail have come together as Amazon buys out Whole Foods supermarket for $USD13.7 billion.

rnrn

The deal sends shock waves across both the online and brick-and-mortar industries.

rnrn

Grocery chains plunged on Friday — Wal-Mart Stores fell as much as 7.1 percent, while Kroger Co. tumbled 17 percent — as investors worried that woes will mount in the increasingly cutthroat industry.

rnrn

Whole Foods is known to specialise in organic, natural products and employes just under 100,000 staff.

rnrn

Analysts think the impact of this purchase will be to drive down prices and dent profit margins for rivals, as well as transforming Whole Foods’ in-store experience as Amazon really gets to work on it.

rnrn

It’s expected that Amazon will integrate Whole Foods’ inventory and online ordering into grocery services like AmazonFresh and Prime Pantry.

rnrn

In the meantime, Amazon Prime customers may start to see Whole Foods products in the AmazonFresh lineup, including the grocers’ prepackaged meals, which make up about 20 percent of Whole Foods’ sales now.

rnrn

rnrn

Sourced: Bloomberg

rnrn

Although an unlikely match for the two mega chains, Amazon has been slowly making its way into the brick and mortar scene, even opening physical book store.

rnrn

Retailers based in Australia worried when the online giant expressed its plans to open in the country, marking the first move over to any pacific region.

rnrn

The acquisition of Whole Foods for USD$13.7 billion its Amazons largest deal, with the buyout of Twitch, an online streaming video game site, for just USD$970 million coming in second.

rnrn

CEO Jeff Bezos had a jump in wealth by USD$10 billion over the past two months.

rnrn

rnrn

The collaboration of these two retail giants means more exciting opportunities for the two companies.

rnrn

Analysis expect AmazonFresh, the food delivery side of the site, to be able to benefit the growth of Whole Foods delivery arm.

rnrn

AmazonGo patented concepts of cashier-less checkouts, and following that ‘check-out free checkouts’ as people walk out of the store as their iPhone tracks their items and paid for them.

rnrn

Amazon is also eyeing new areas. On June 15 Bloomberg report had it eyeing a $US9 billion bid for Slack, the maker of a trendy chat app that companies use for in-house discussion.
rn
rnIf the deal does not go through, then Amazon will have to pay a $USD400 million breakup fee, but in Bezos case that is just under five percent of his total worth.

rnrn

Since the announcement of the deal, Amazon shares jumped 3.3 percent, pushing its market capital to $USD470 billion.

rnrn

Unfortunately the chain has no plans yet to move into the New Zealand market.

rn

Rate This Article: