Whole Foods CEO calls Amazon buyout a "courtship"

Adjust Comment Print

That's because the long journey of, say, an avocado from Mexico gets progressively harder the closer it gets to the final buyer. "What happens when a machine bruises a piece of fruit and a customer is dissatisfied?" Walmart, which has the largest share of the US grocery market, is ramping up its grocery services as a way to fuel online sales.

But shoppers could start to grow more comfortable buying, and Amazon sees the grocery business as a hot market because shoppers buy weekly or even more often for items they run out of.

Amazon now has a grocery delivery service called Amazon Fresh, available in about 20 cities in the USA, but it struggled to make enough headway in becoming America's grocer.

Giammona says there is some concern among "hard-core Whole Foods fans" that Amazon could change the grocery's image and product options.

"Our culture is going to evolve", Mackey said.

When Amazon bought the upscale grocery chain Whole Foods for $13.7 billion, it immediately set off speculation about the changing nature of shopping.

"We would not be surprised if there is a bidding war" for Whole Foods, the 465-store chain that focuses on natural and organic groceries, analyst Karen Short of Barclays Capital Inc. said in a note to clients Friday.

Aaron Turner, a Los Angeles-based analyst who covers Grubhub for Wedbush Securities, wrote in a note to clients Monday that the tech giant's plans to buy Whole Foods for almost $14 billion set it up for a larger food ordering and delivery play.

The deal could also make competing delivery services superfluous. Amazon was on a huge growth curve prior to the acquisition, now it will leverage its distribution and data against the entire food industry, not just the healthy and organic categories.

It took a different path from online competitors like Shipt, Instacart and Peapod, which use existing retailers to deliver groceries and avoid holding inventory.

The company that's dominated mass retailing - now slides on to the next level. Walmart has about 4,700 US locations, with plans to offer curbside grocery pickup at 1,100 by the end of this year.

Culpepper, who owns Kroger Co shares, said Kroger is the company would be most likely improve Whole Foods´ efficiency, but that it would have difficulty matching Amazon´s cash offer. Instead, Amazon is adding its own logistics network because it simply can't have enough - not surprising considering the company was responsible for 43 percent of all online sales in the USA previous year.

They have had the courage that nearly no other public company has had the courage to, basically, resist the drumbeat of short-term, quarterly earnings that have had us trapped here for a couple of years, as our same-store sales- came down. We're growing our business with UPS.

We hope you're listening, Bezos.

According to analysts at Cowen & Co., Amazon, which is expected to be the ninth largest grocery retailer in the USA this year thanks to Amazon Fresh, would become the third largest with the acquisition of Whole Foods.

Lately, Whole Foods has been battling its worst sales slump since its IPO in 1997, resulting in pressure this spring from activist hedge fund Jana Partners, which Whole Foods CEO John Mackey accused last week of being "greedy bastards". Costco Wholesale shares were down 1.90 percent at $163.93.

"You don't shop for appliances multiple times a week". "It's a better experience to spend time with a human rather than spend time with a computer".

Keep the premium fresh foods, lose the high prices. "That's what drives customer traffic".

When supermarkets were introduced in the 1930s they themselves revolutionised the retail industry.

Comments