For Whole Foods workers, fears of robots, drones and culture clash

Marco Green
June 28, 2017

Online retail giant Amazon made a dramatic push into brick-and-mortar retail Friday with the almost $14 billion purchase of Austin-based organic grocery chain Whole Foods Market.

'As Amazon enters the grocery market proper, it will put a lot more pressure on existing grocers, ' Neil Saunders, managing director of the research firm Global Data Retail, told the AP.

The deal represents a dramatic turn in strategy for Amazon, which has offered food delivery through its Fresh service for a decade but has not made a major dent in the $700 billion grocery market.

John Mackey will remain as CEO of Whole Foods Market and Whole Foods Market's headquarters will stay in Austin, Texas.

Amazon, meanwhile, has been expanding its reach in goods, services, and entertainment.

On Friday, June 16, 2017, online retailer#Amazon announced its plans to purchase #Whole Foods. While both companies aren't headquartered here - check out Austin Inno for the deal's impact on Whole Foods' home base - the deal is certainly going to have an impact here and everywhere else across the country, if only due to their collective reach.

Amazon is the world's largest online retailer by sales.

"This is an quake rattling through the grocery sector as well as the retail world", said Mark Hamrick, senior economic analyst for Bankrate.com.

The deal comes after Amazon spent almost a decade trying to find a way into the fresh-food delivery business through various endeavors, without much success.

Whole Foods now has an exclusive delivery arrangement with Instacart which isn't due to expire for several more years.

Several workers expressed relief and happiness about the planned sale, which came as Whole Foods faced pressure from hedge fund investor Jana Partners to improve results. That fits with Whole Foods private-label push to compete on price, and gives Amazon a bigger foundation on which to develop its own food brands. You point out that 24 percent of millennials bought something from Whole Foods past year.

Amazon's $13.7 billion purchase of Whole Foods means the supermarket, and retailing overall, will never be the same. It was recently granted a patent for technology that would block shoppers from comparing prices using their mobile devices while they are in stores.

Whole Foods, founded in 1978, saw its stock peak in 2013 at $65.24.

According to multiple reports, Whole Foods also invested in Instacart.

As for its stock price, the grocer skyrocketed up almost 30 percent in just one day. But those involved expect the deal to close in the second half of the year. The addition of hundreds of physical retail locations could also represent a game-changer for the company's ability to deliver products to customers in ever-shorter time frames.

After the Whole Foods announcement, stock prices for Wal-Mart, Target and Costco sank.

Other reports by Click Lancashire

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