Amazon To Buy Upmarket Grocer Whole Foods For US$13.7b

Amazon's Whole Foods Purchase Isn't Just About Groceries. It's About Everything.

Amazon deal for Whole Foods could bring retail experiments

You point out that 24 percent of millennials bought something from Whole Foods previous year.

Walmart, which has the largest share of the USA food market, has already been pushing harder into e-commerce to build on strength in its stores and groceries.

Adding groceries to its repertoire gets Amazon that much closer to being a one-stop destination for everything you buy. Same goes for Amazon Dash, whose Wand barcode scanner the company has just resurrected.

Amazon already offers a home delivery service for groceries in certain markets.

"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.

But it was Whole Foods that fell behind as shoppers found alternatives to the organic and natural foods it helped popularize since its founding in 1978.

In Whole Foods, it is acquiring a company that has recently come under pressure from investors for its lagging performance.

"We are always concerned when there is some loss of brick-and-mortar stores out there", Mullins said after just hearing of the news early Friday.

The Whole Foods purchase changes the landscape dramatically.

Whole Foods shares were trading just above that level on Friday, as investors saw negligible regulatory risk to the deal closing.

"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.

Feinberg also says that Amazon has a test store called Amazon Go in Seattle that is displaying how Amazon does groceries. "A lot of people will love that", said Whole Foods customer Brad Anderson.

Saunders suspects that Amazon will try to get food suppliers to lower their prices, impacting companies that both make and distribute food. For example, Walmart has 4,500 stores, while #Whole Foods has a small 460 stores.

The deal further shows Amazon's willingness to take on Bricks and Mortar (B&M) outlets. But she would never buy food online, she said. According to multiple reports, Whole Foods also invested in Instacart.

This deal will put it on the map of the $700 billion grocery market.

SELYUKH: For Amazon, the deal gives it a physical presence in hundreds of locations but also places Amazon smack in the middle of a massive consumer goods market - the stuff people buy over and over again for their entire lives.

Whole Foods sent a letter to customers after the merger announcement, calling the agreement a new chapter in Whole Foods' history and an incredible opportunity. The Mom and Pop stores will slowly see a decrease in numbers, as companies like Amazon and Walmart only grow in size and work to obtain more of the market, keeping them ahead of the competition.

The deal was Amazon's first valued at more than $1 billion, making it a coveted trophy for investment bankers in search of fees and glory.

"I like picking out my own stuff", Hall said.

Latest News