Shoppers may see big changes after Amazon buys Whole Foods

Amazon buying Whole Foods in bold move into brick and mortar

Shares of many grocers and retailers slumped Friday after Amazon announced a $14 billion deal to buy high-end grocery chain Whole Foods Market.

Online retail giant Amazon is making a bold expansion into physical stores with a $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.

JPMorgan analyst Doug Anmuth believes that the buyout would allow Amazon to be more innovative in delivering the customer buying experience in Whole Foods stores.

Last Friday, when Amazon announced the acquisition, shares of Walmart as well as Target, Kroger, and Costco all tumbled.

But down the line, Amazon may decide to wrap Whole Foods into AmazonFresh, its existing grocery delivery service for Prime customers, Cohen said.

"I anticipate that Amazon should be able to lower the cost of Whole Foods and better enable them to compete in that market and start to bring some of those great organic products that people have liked without necessarily having to capture their whole pay check", he said.

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 U.S. chains such as Kroger Co and Albertsons LLC.

The deal could put Whole Foods in a position to dominate two areas that grocery stores have been focusing on to gain new customers and increase revenue -convenience and high quality organic food, says J.P. Eggers, an associate professor at NYU Stern who focuses on tech and retail.

The $42 a share offer from Amazon is a 27 percent premium over Whole Foods closing stock price on Thursday. Amazon also offers grocery shipments elsewhere, but that's tough with perishable foods.

For Amazon, the deal marks an ambitious push into the mammoth grocery business, an industry that in the United States accounts for around $700 to $800 billion in annual sales.

Whole Food recently opened a store in the city in the former Hahne & Co. building between Broad and Halsey Streets.

Jon Hauptman, senior director of retail for grocery consulting firm Willard Bishop in Long Grove, Ill., said e-commerce in the supermarket industry is not highly developed.

Amazon's shares rose 2.4 percent to $987.71, adding $11 billion to its market capitalization, which in one sense makes the acquisition almost free for Amazon shareholders.

Whole Foods shares had been trading at about US$65 in October 2013, but plunged to around US$27 in September of previous year.

No. Amazon says Whole Foods stores will keep their name and be run as a separate unit of the company. Other retail and food distribution-related stocks in the USA and Europe, including Wal-Mart and Target, followed suit.

Whole Foods, founded in 1978, saw its stock peak in 2013 at $65.24. Walmart is very much taking on Amazon and utilising its network to develop ecommerce and click & collect at its thousands of stores.

Related:

  • Presidential Polls: Meira Kumar is opposition's answer to NDA's Ram Nath Kovind

    The RJD chief claimed that the JD (U) had agreed on fielding a combined Opposition candidate but later went back on its word. India has a special electoral college that votes for the president, which includes federal and state legislative members.

    Amazon deal seen as disruptor of grocery business

    Shares of other grocery-selling chains like Kroger, Target , Sprouts Farmers and Costco experienced a dip after the announcement. Analysts say the Whole Foods footprint and distribution channel could theoretically make 5-minute deliveries a reality.
    Trump disputes Russian interference in 2016 election

    Trump disputes Russian interference in 2016 election

    Last year, reports circulated that hackers had targeted the voter registration systems in the states of IL and Arizona. He later said he would "go along" with Russian Federation, but thought it also could have been China.
  • Verstappen leads FP2 of Azerbaijan F1

    The third and final free practice session takes place at 11am (UK time ) on Saturday ahead of qualifying at 2pm. Elsewhere, Daniel Ricciardo was third in the sister Red Bull , with Ferrari's Kimi Raikkonen fourth.
    Darjeeling crisis: GJM chief Bimal Gurung threatens to intensify stir

    Darjeeling crisis: GJM chief Bimal Gurung threatens to intensify stir

    Giri had stated on Thursday, "We have made a decision to resign from the GTA". The formation of GTA came after five years of intense agitation.
    Warriors' Game 5 win wraps up highly-watched NBA Finals

    Warriors' Game 5 win wraps up highly-watched NBA Finals

    Check out the reactions on Twitter to the Golden State Warriors win below and on the following pages. Pretty much all their big-name guys are in their 20s, and they don't show any signs of slowing down.
  • Minnesota Releases Video of Philando Castile Shooting

    Authorities have released a new dash cam footage of moments that transpired before Philando Castile's shooting took place in 2016. During the incident, Castile informed Yanez that he was legally carrying a gun after being pulled over for a broken tail light.
    Five London towers being evacuated over fire safety fears: Authorities

    Five London towers being evacuated over fire safety fears: Authorities

    Residents are to be evacuated from five council tower blocks over fire safety fears in the wake of the Grenfell Tower blaze. A total of 79 people are either dead or missing presumed dead as a result of the Kensington blaze, according to police.
    Is Sean Spicer Leaving The White House Podium?

    Is Sean Spicer Leaving The White House Podium?

    At one briefing, when she was questioned why Spicer was missing, she mentioned his role was probably getting upgraded . We have been meeting with potential people who may be of service to this administration.
  • Tech CEOS visit White House to talk modernizing government

    T-Mobile said "senior" executives would be at the White House summit, but didn't provide specifics. Trump, who strolled in at the end of the meeting to greet the tech titans.

    European Union says Brexit citizens issue not about 'generosity'

    It's still unclear how this divergence in performance between the two sides of the Brexit negotiating table will play out. Almost three million Europeans are now living in Britain and around one million Britons living in different EU nations.

    US says it shot down Iranian-made drone in Syria

    And so the battle is moving inexorably towards a band of territory where the main highways linking Iraq and Syria are located. It is the first time any activity by Russian or Syrian government forces have seriously affected the coalition against Daesh.

Comments

Latest news

Google to stop reading your Gmail to help sell ads
The search engine chose to stop scanning the inboxes of Gmail free users for targeted advertisements later this year . Google does in fact sift through the contents of your Gmail, though starting soon, it will stop doing that.

Spicer seeks more strategic role at White House
The lawsuit points to a tweet Trump posted on May 12 that suggested he had recordings of his conversations with Comey. The strategy is an acknowledgment of Trump's lack of policy prowess, and White House aides are aware of that.

Toshiba gets earnings report extension, faces delisting risk
Toshiba has already chosen the consortium as the preferred bidder for the sale of Toshiba Memory, its memory chip subsidiary. Western Digital has sought a USA court injunction to prevent any deal that does not have its consent.

Sega Forever Let's You Take the Classics On the Go
The Japanese video game developer had made the announcement of releasing the classic games on June 21 morning. Let us know in our discussions and join us on Discord , on our Facebook page , or Twitter !

Study links legalized pot with increase in car crash claims
This week, two studies were released examining the effects of driving fatalities in states that have legalized marijuana. Another study published Thursday tied an increase in auto insurance claims to marijuana legalization.

Sears to close another 20 stores
Sears Canada will close 20 of its full-line stores, 15 Sears Home Stores, 10 outlet stores and 14 Sears Hometown locations. Sears launched a pilot DieHard store in San Antonio in February, Automotive News reported .

Spanish state prosecutor accuses Jose Mourinho of tax fraud
The claims against Mourinho come amid a lengthening list of tax fraud cases involving football stars in Spain. The prosecutor said Ronaldo used shell company in the Virgin Islands to cheat on his taxes.

UCLA Basketball's Lonzo Ball selected 2nd by the Los Angeles Lakers
Jayson Tatum and Josh Jackson have been the top ranked forwards in the draft for ages and that has not changed just yet. The plaza outside Barclays Center is decorated in green and blue - as in Celtics green and 76ers blue.

Senate GOP releases bill to cut Medicaid, alter 'Obamacare'
The bill would continue the enhanced Medicaid expansion funding from Obamacare until 2021 and then phase it out over three years. McConnell may have a tough job convincing enough Republican senators that the Senate bill improves on the House version.

Britax Recalls 207000 Carseats Over Chest Clips That Can Break
According to Britax, the affected child safety seat have a center tab on the chest clip marked "ABS" that may break. Britax says the vehicle seats remain safe in a crash without the chest clip until the remedy kit can be installed.

Trump confirms he's under investigation
Rosenstein appointed Mueller following the recusal of Attorney General Jeff Sessions in the FBI's probe of Russian influence. In a tweet Friday morning, President Donald Trump says he's being investigated for firing FBI Director James Comey .

Gergen: Special election victories show Trump could beat Dems in 2020
The Georgia race ends as the most expensive House campaign in US history, with a tab that may exceed $50 million. They argue it shows their chances are good of retaking control of the House in next year's midterm elections.

Powerball jackpot grows to estimated $435 million
The American lottery's jackpot has rolled over 18 times since someone in Littlefield, Arizona, won $60 million on 1 April. Codisboti said he bought one ticket for the big drawing and plans to buy another because of his winning streak.

Ariana Grande resumes Dangerous Woman Tour in Paris
But she returned to the city on Sunday for an all-star benefit concert for victims that raised some $3 million. Ariana also released her live cover of " Somewhere Over the Rainbow " as a charity single.

Dashcam Footage Of Police Killing Of Philando Castile Is Made Public
When Officer Yanez opened fire, another officer near the vehicle jumped back, and Officer Yanez began yelling at the driver. It was a first - a Facebook Live of the tail end of a Minnesota police officer fatally shooting motorist Philando Castile .

Other news