Mike Wuerthele
A blockbuster deal announced Friday morning will see e-commerce giant Amazon buy organic and all-natural food vendor Whole Foods in an all-cash deal — and other retailers and grocers are seeing massive stock drops because of it.
Amazon had already said that Whole Foods stores will continue to operate under the same name, as a discrete division of the company. Whole Foods Chief Executive John Mackey is staying in place, as is the company's headquarters in Austin, Tex.
"Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy," Amazon founder and Chief Executive Jeff Bezos said in a statement. "Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades — they're doing an amazing job and we want that to continue."
A report in December 2016 claimed that Amazon was planning on opening up more than 2,000 self-branded grocery stores. In September 2017, Whole Foods had 456 stores, and 87,000 employees.
The deal gives Whole Foods shareholders a 27 percent price premium, valuing the company at $42 a share. The deal is having repercussions throughout stock markets, with many grocery chains down 10 percent or more as a result. Walmart and Target are also seeing impacts, down 6.1 and 9.2 percent respectively at the time of this report.
"This partnership presents an opportunity to maximize value for Whole Foods Market's shareholders," said Mackey. "At the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers."
Amazon has been reticent to expand its AmazonFresh delivery grocery market, and the deal appears to be an easy way to expand this market by utilizing the Whole Foods infrastructure to do it. At present, Amazon Fresh services 18 metropolitan areas worldwide, and has 500,000 items available.
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90 Comments
I guess that same-day local-pickup for Amazon packages will come very quickly.
I thought Walmart was bad for retailers, now Amazon is going to mess with grocery stores. We'll see what happens when Amazon undercuts (sells at a loss) other grocery stores to gain sales by harvesting their personal information and selling that (SOP for them). People complain about Apple but look at what Amazon is doing. I can't see it stopping with Whole Foods, who typically over prices everything.
Getting drive up windows for existing Whole Foods stored isn't going to happen.
I'll stick to Wegmans thank you very much!