Amazon moves into real-world stores with $13.7 billion Whole Foods deal

Joanna Estrada
June 27, 2017

But shoppers could start to grow more comfortable buying, and Amazon sees the grocery business as a hot market because shoppers buy weekly or even more often for items they run out of.

"Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy", said Jeff Bezos, Amazon founder and CEO.

But no one expects Whole Foods to keep doing business the way it has been.

As Recode first reported past year, Whole Foods has made an investment in Instacart, though it's believed to be a small one and does not involve a board seat.

"Amazon will reduce prices and change the assortment of products carried in Whole Foods stores to attract a larger customer base", said Ladd. She's skeptical that groceries will go purely online and thinks it'll be more of a hybrid model, where people use a mix of online ordering, restaurants and traditional grocery stores.

Amazon also has been testing automation technology at a Seattle convenience store that's now open only to Amazon employees. In the United Kingdom specifically, Amazon and Morrisons signed a deal previous year.

Amazon spokesman Drew Herdener said plans do not include reducing jobs as the result of the deal and that the company does not plan to automate Whole Foods cashiers jobs with Amazon Go technology.

Wal-Mart, Target or others could respond with their own bids for Whole Foods, or for other food retailers such as Sprouts Farmers Market Inc., which is now "100 percent in play", according to Gordon Haskett analyst Chuck Grom.

The Whole Food purchase price topped $13.7 billion dollars in cash.

Courtney Hiddeman and her family live right down the street from the Whole Foods "world headquarters" on Bowie Street in Austin.

But despite the Whole Foods acquisition and, by extension, the potential technology Amazon could implement in brick-and-mortar outlets, the company said it now has no plans to automate the jobs of cashiers in Whole Foods stores after the acquisition.

"This deal should leave no doubt that Amazon is deadly serious about dominating all aspects of retail", Paul Cuatrecasas, chief executive of Aquaa Partners, a London-based investment banking firm, said in an email. It has expanded from a book seller into a merchant of almost all consumer products, as well as producing videos.

"We've become very comfortable with them (Amazon) as that online retailer, and this just puts them into that physical space, which is something that they've lacked up until this point", said food marketing expert John Scroggins of in Springfield. "It's just curious, isn't it, that Amazon has offered so many things online".

Goldman Sachs Group Inc advised Amazon on the deal and provided bridge financing.

Meanwhile, in a letter to its customers, Whole Foods Market, Inc.

Other reports by Click Lancashire

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