The acquisition of the two companies means Amazon can vertically integrate a business it has dabbled in since 2007, when it first offered grocery delivery in Mercer Island, Wash.
Amazon.com’s plan to buy Whole Foods Market Inc. sparked an avalanche of discussion about how the online retail giant could transform the USA grocery industry in the years ahead. Amazon did not respond to a request for comment.
Experts note that most Whole Foods shoppers are already familiar with Amazon and are lining up for what could be a smooth transition.
At a Whole Foods town hall meeting on Friday, CEO John Mackey gushed about how “utterly amazing” the partnership will be, and said that only good things could come of it. According to Kantar Retail, online sales accounted for only 2.0% of the more than $700.0 billion US (SPY) grocery sector a year ago.
Whole Foods has been pressured to sell as sales have declined.
With its acquisition of Whole Foods, Amazon acquires a portfolio of a dozen stores in New York City, including one at the Time Warner Center and another on the way at Manhattan West, as well as the grocer’s distribution-supply chain.
“We do think our partnership with Amazon is gonna help us do that more skillfully and, hopefully, faster”.
Such changes may be a long way off, and Amazon has plenty of time to change its strategy, with the $13.7 billion deal not expected to close until the second half of the year. Amazon has an obvious ability in e-commerce, but retailers such as Wal-Mart and Target have recently aggressively stepped up their digital efforts.
Say “Whole Foods” and some envision a gastronomic nirvana, overflowing with a healthy bounty worth a premium price. “Everybody’s been kind of joking that it’s going to be robots and drones”, Clark said of potential changes from Amazon, which uses robots in its warehouses and is testing drones for delivery. The chain’s high standards for how animals are treated make the higher prices worth it, she said. “Whole Foods is our main competitor”, said Bustamante.
Mr. Mackey appeared to jab at the investor pressure Whole Foods has been facing from activist investors including Jana. An Amazon spokesperson told Bloomberg that there are no plans for job cuts or increased automation at Whole Foods stores, and Mackey certainly didn’t mention at the town hall that any jobs might be eliminated.
“This was a very exciting announcement because I think consumers will be the ones to benefit”, said Lindsay Sakraida, director of content marketing at DealNews. Using machine learning and AI technology, similar to that of a self-driving auto, Amazon automatically adds the item to your cart and charges your account when you leave the store.
“This is not a Tinder relationship”, said Mackey, referring to the online-dating service.