Amazon-Whole Foods Marriage Could Disrupt Grocery Business (NASDAQ:AMZN)

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The all-cash transaction is valued at $13.7 billion, with Amazon assuming Whole Foods' debt. Her daughter Bethany Capels agrees and says she likes Whole Foods for the organic fruits she can serve her kids. It operates approximately 456 stores in the United States, Canada, and the United Kingdom.

While the deal is still to be executed, Whole Foods has pointed out that the brand name would remain the same in the stores, headquarters will remain in Austin and John Mackey will stay on as CEO.

Seattle-based natural foods co-op PCC Natural Markets has competed with both Whole Foods and Amazon for years and held its own, said Cate Hardy, PCC's CEO.

Armed with giant warehouses, shopper data, the latest technology and almost endless funds - and now with Whole Foods' hundreds of physical stores - Amazon is set to reshape a US$800 billion grocery market that is already changing rapidly.

Peggy Hall, a Unionville resident shopping Friday at a Whole Foods supermarket in West Hartford Center, said she would probably not buy food online.

When Amazon made a decision to approach Whole Foods last month, it picked Goldman for advice. (NASDAQ:AMZN) "a launching pad not just for food but possibly drugs as well where customers aren't willing to wait even a day".

Some investors may be wondering whether Amazon could disrupt grocery stores the way it upended the bookstore business.

"We believe AMZN can work to transform the physical retail experience".

It's also been testing automation technology at a Seattle convenience store that's now open only to Amazon employees.

These online retailers are taking on a number of major firms dominating the supermarket scene for so long, including Walmart supercenters, Safeway, and Publix. Those stores solve much of Amazon's "last mile" delivery challenge for fresh groceries.

The S&P 500 market capitalization loss for just 20 stocks in the retail and food sector was $37.7 billion by Friday afternoon, according to CNBC.

The acquisition, which has not yet received approval from the shareholders of Whole Foods Market, adds a 27% premium to Thursday's closing value of its stock.

Amazon could also get a better picture of customers by marrying data from Amazon and Whole Foods' loyalty programs.

"Amazon can now answer the question, What are we having for dinner", he says.

Shares of Amazon rallied 2.4 percent. The stock is up more than 31% so far this year.

Whole Foods, often derided as "Whole Paycheck" for its high prices, could see its reputation change if Amazon, a master at undercutting its brick-and-mortar rivals, passes any savings from automation to customers.

Meal-kit companies: Whole Foods is also known to offer plenty of prepared food, so Amazon could be positioned to bank into this operation that allowed the likes of Blue Apron to propel itself to an IPO from being a humble startup business.

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