News that Amazon bought the high-end grocery store chain for a reported $13.7 billion on Friday left some Americans stunned over the big purchase and others musing about where the largest USA online retailer may be headed next. Amazon and Whole Foods both have a presence in the Lehigh Valley.
Amazon aims to open as much as 2,000 grocery stores in the United States over the next decade, according to a report previous year. It's also testing a variety of retail concepts, including convenience store that does not need cashiers, and a drive-in grocery service that delivers online-placed orders straight to your trunk.
The "implications ripple far beyond the food segment, where dominant players like Walmart, Kroger, Costco, and Target now have to look over their shoulders at the Amazon train coming down the tracks", O'Shea said. However, the acquisition of Whole Foods Market makes it the company's first big move into the brick and mortar retailing.
Analysts are already imagining the possibilities: Amazon has access to all those physical Whole Foods locations while Whole Foods (which is keeping CEO John Mackey and its name) has access to Amazon's tech and logistical smarts.
Amazon.com Inc said on Friday it would buy USA organic supermarket chain Whole Foods Market Inc for $13.7 billion, including debt, marking the internet retailer's largest deal and biggest foray into the brick-and-mortar retail sector. The company reportedly considered buying Whole Foods last fall.
Meanwhile, Whole Foods - with a fleet of more than 460 stores - has come under fire from activist investors for dreary sales as organic grocers such as Sprouts Farmers Market and Natural Grocers and traditional grocers such as Walmart, Kroger and Target, increasingly offering their own organic options, hone in on the Austin-based grocery chain's turf.
It also shows Amazon's growing interest in groceries. "This is going to be their "wow" moment that says, 'We got to get into this really quick before Amazon takes over all these Whole Foods stores'".
Whole Foods-known for its natural and organic grocery choices-currently operates more than 460 stores in the USA and the United Kingdom, including 13 locations across Canada (with four in Vancouver). A spokesman for Dunnhumby said it remains committed to its partnership with Whole Foods. The transaction is subject to approval by Whole Food's shareholders, regulatory approvals and other customary closing conditions.
Or even-it could happen-as Whole Foods ultimately winds up rolled into Amazon Fresh?
Amazon has experimented with the occasional pilot bookstore or grocery store in the past.
Why is Amazon buying the massive grocery chain? He added that these are likely the higher-income households who tend to buy more expensive brands and cuts of meat.