Amazon's purchase of Whole Foods 'bought a distribution network,' expert says


According to the deal worth US$13.7 billion (£10.7 billion) the retail grocery store chain is to keep the Whole Foods Market brand name and John Mackey is reportedly to remain its CEO.

Whole Foods operates 460 organic grocery stores across the United States, including many in the Bay Area, as well as Canada and the United Kingdom.

In the USA "this adds 440 refrigerated warehouses within 10 miles of probably 80% of the population", said Michael Pachter, an analyst for Wedbush Securities.

The deal could be "transformative", Moody's lead retail analyst Charlie O'Shea said, "not just for food retail, but for retail in general".

On Friday, June 16, 2017, online retailer#Amazon announced its plans to purchase #Whole Foods.

PCC has also partnered with its competitor, offering delivery through Amazon Prime Now since April previous year.

Amazon is making a bold expansion into physical stores with the $13.7 billion deal to buy Whole Foods, setting the stage for radical retail experiments that could revolutionize how people buy groceries and everything else.

Kristin Mullins, president and chief executive of the Ohio Grocers Association, said her first question about the Whole Foods acquisition was: What does the move mean for the number of traditional "brick-and-mortar" physical stores in Ohio?

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There's also the "grocerant" trend - a blending of grocery stores and restaurants. Whole Foods itself had launched an offshoot chain named after its "365" private label brand in a nod to the popularity of no-frills chains.

Amazon also has been testing automation technology at a Seattle convenience store that's now open only to Amazon employees. Shoppers skip the checkout line, and their Amazon accounts get automatically charged. Only expectedly so, as grocery stores in the last few years have been fighting online as well as overseas players coming into the industry. "A lot of people will love that", said Whole Foods customer Brad Anderson. Cuatrecasas said Amazon's acquisition will set a precedent that other online companies are likely to follow.

At least one customer was concerned that an Amazon purchase would further distance Whole Foods from its roots as a purveyor of premium, organic and specialty foods.

How quickly items get delivered "is going to have to be improved considerably" for customers to order something online instead of going to the prepared-foods counter at the supermarket, she said. The deal on the surface seems valuable for stakeholders in both companies.

"I'm excited to see maybe if they do some kind of thing with Prime now and Whole Foods, that would be interesting to me", Hiddeman said. Amazon also offers grocery shipments elsewhere, but that's tough with perishable foods. It was recently granted a patent for technology that would block shoppers from comparing prices using their mobile devices while they are in stores.

Amazon's move is a threat to supermarket chains like Kroger, fresh produce retailers like Sprouts Farmers Market, big-box retailers like Walmart and Target that have moved aggressively into groceries, and companies like Costco that sell bulk products, including food, at discounted prices.

Walmart and Amazon have had their sights on each other for years, each aiming to be the dominant seller of goods - however consumers of the future want to buy them. The stores could also showcase gadgets such as Kindle e-readers and Fire tablets.