Amazon buying Whole Foods in bold move into brick and mortar

A Wall Street sign near the New York

Still, if Amazon's deal for Whole Foods closes, that could mean Amazon ends up being a shareholder of Instacart.

John Mackey will continue as chief executive of Whole Foods, and the company's headquarters will remain in Austin, Texas.

Amazon will gain a footprint of 456 supermarket stores in North America and Britain with the acquisition of Whole Foods, boosting its delivery capacity and allowing it to compete directly with USA chains such as Kroger Co and Albertsons LLC.

Amazon's purchase of Whole Foods also brings disruption to the $700 billion USA grocery sector, a traditional area of retailing that stands on the precipice of a ferocious price war. Meanwhile, the more than 460 Whole Foods stores in the U.S., Canada and the United Kingdom could be turned into distribution hubs - not just for delivering groceries but as pickup centers for online orders.

And that quote came just before a jaw dropping announcement Friday morning: Amazon is buying Whole Foods and its 460 stores for $13.7 billion.

Amazon is already playing with innovative ways to make grocery store runs more convenient.

It is predicted that Amazon could become the ninth-largest retailer by 2017 and third-largest grocery retailer by 2021. "Whole Foods was losing market share to Kroger", said Brittain Ladd, who until earlier this year was a senior manager working to roll out AmazonFresh globally.

Whole Foods will use "Amazon's superior inventory management, delivery management, better management of the customer database, and speed of service to checkout".

"It's amusing. I was just ordering something on Amazon", said Nick Yezierski, a hotel manager who was eating breakfast outside the Whole Foods flagship store in Austin, Texas.




June 16 A decision by Goldman Sachs Group Inc past year to move an investment banking veteran to Seattle, as well as Evercore Partners Inc's hiring of a top banker defending companies against activist investors, has paid off handsomely.

Plans for how Amazon plans to integrate Whole Foods' cutting-edge organic and natural products and reputation for presenting innovative products to consumers into the e-commerce giant's existing dominance in other retail categories were not announced. News of the deal took a bite out of stocks at competitors such as Walmart and Kroger.

Projected cost of Whole Foods purchase by Amazon.

It is estimated that Americans spend about 6 percent of their income on food and it is a regular expense.

Amazon's various forays into selling groceries - Amazon Fresh, Amazon Pantry, Prime Now - will get a boost from Whole Foods and its affluent customer base.

"Fresh foods are the final frontier for Amazon", Portalatin said.

Walmart's also put a lot of stake in battling Amazon in the grocery business, where its huge network of superstores gives it up a leg up.

The deal comes a month after Whole Foods announced a board shake-up and cost-cutting plan amid falling sales and pressure from activist investor Jana Partners.

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