Retail Giant Amazon Plans to Buy Whole Foods for $13.7 Billion

Posted June 22, 2017

Through Whole Foods, Amazon would gain a national store footprint in the United States along with a presence in Canada and the U.K, with over 460 stores in total.

In a town hall meeting at Whole Foods' Austin, Texas, headquarters on Friday, the day the deal was announced, Mr. Mackey and other executives applauded the "historical moment" for Whole Foods, saying that the two companies hit it off right away, according to a security filing transcript.

Amazon will scoop up more than 400 Whole Foods stores across the country, instantly making them a major player in the grocery industry. Retailers planning to compete for customers with Amazon and Whole Foods need to offer customers their own line-free shopping experience.

"Every grocery store out there now is having a conversation about how much they can afford to spend to keep Amazon out of the space", said Brian Culpepper, a portfolio manager at James Advantage funds.

The Whole Foods Market in Midtown New York is seen on June 16, 2017.

More news: McCain: Americans 'stupid' to travel to North Korea
More news: All talk, few trades before NHL's expansion roster freeze
More news: Trump says Congressman Scalise 'in some trouble' after shooting

Those big-box competitors were already disadvantaged by Amazon's captive audience, an estimated 80 million Prime members, who could theoretically order groceries online or task Alexa, Amazon's virtual assistant, to prepare a delivery or arrange for a pickup at the nearest Whole Foods.

For now, Whole Foods seems happy with the deal. Wal-Mart was down 0.32 percent at $75. But like an old traditional marriage, where there are all kinds of rules and chaperones, we can't consummate the marriage, (LAUGHTER) until we're actually officially hooked up. Carmen Clark, 37, a six-year employee at a store in Mount Pleasant, South Carolina, said some workers worry that Amazon-led automation could lead to job cuts. "But they're just not gonna be, I don't think, forced on us by Amazon". That's even if Amazon insists things will stay the same for a while. "This is not - this is not a Tinder relationship".

On Friday, Amazon announced it was buying the upscale grocery chain for $13.7 billion in a deal that will likely have a profound impact on America's retail and grocery industries.

"Amazon has had grocery ambitions for a long time", says Bloomberg food reporter Craig Giammona.

Experts note that most Whole Foods shoppers are already familiar with Amazon and are lining up for what could be a smooth transition. What the online retail behemoth is planning with the Whole Foods deal and its 460 brick and mortar locations throughout the US, Canada, and the United Kingdom is anyone's guess, but as Business Insider points out, this may be a pivotal step in the future of grocery shopping. Whole Foods had been working to get better at data collection with the rollout of a loyalty program, and Amazon is expected to give those efforts a significant boost.