Amazon buys Whole Foods in $13.7 billion deal

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With the Whole Foods acquisition, analysts anticipate that Amazon will be the third largest retail grocery, behind Wal-Mart and Kroger, by 2021.

Barry C. Lynn, competition policy expert at the New America think tank in Washington, warned of "America's Amazon Problem" that has seen one company dominate "every corner of online commerce". "When you talk into an Amazon bookstore, it's a temple to Prime", Stone says. Now it wants to fill your fridge. "This deal has dramatically flipped the table on traditional companies". Phrases like "synergy" were mercifully not used. "Whole Foods Market has been satisfying, delighting and nourishing customers for almost four decades - they're doing an awesome job and we want that to continue".

Whole Foods will keep operating stores under its name and John Mackey will as CEO, with headquarters in Austin, Texas.

On the flip side, Amazon could use Whole Foods stores as pickup locations for deliveries, an option Amazon already offers in many cities by installing lockers at 7-Eleven and other retailers.

The merger of Whole Foods and Amazon is expected to close later in 2017 after gaining approval from USA regulators and Whole Foods' stockholders.

The purchase in one fell swoop gives Amazon, which until now has operated nearly entirely on the internet, a big presence in the brick-and-mortar world on Main Street, with more than 450 stores in the US, Canada and Britain.

Several retailers have been experimenting with ways to get people to buy groceries online, a habit that still hasn't fully taken off. Walmart is trying to take advantage of its brick-and-mortar footprint through a service where people can buy groceries online and pick them up in the store.

"This might be an opportunity for consumers who have felt that Whole Foods is inaccessible", said Lauren Beitelspacher, a marketing professor at Babson College in MA.

But Whole Foods, which has been feeling the heat to bolster its stock for more than a year, has a new owner with cash to burn, significant technological expertise, and a willingness to invest aggressively in a quest for dominance of a brand new sector. What these customers may not realize is that the past few years have been rough for the upscale grocery chain.

"Everyone's writing about the impact the Whole Foods deal could have on the Target or Kroger types", Roswech said, "but really what is the impact this has on brands, which are in a position to be disintermediated from that retail position that's defined the past century or so for their products?" It's unclear how that arrangement will be affected by the Amazon acquisition should it go through. The other, nicknamed "Whole Paycheck", is known for the premiums it charges for specialty foods and its workplace culture that compensates cashiers and other staffers well.

"Make no mistake, Walmart under no circumstances can lose the grocery wars to Amazon", said Brittain Ladd, a strategy and supply chain consultant who formerly worked with Amazon on its grocery business. Merger mania has produced plenty of deals over the last few decades that haven't unlocked any value for corporate shareholders or strengthened the US economy.

Belpointe Chief Strategist David Nelson told CNBC that the acquisition of Whole Foods will give, Inc.

Many deals don't receive an appropriate level of regulatory scrutiny.