Whole Foods Market will still run physical stores under its own brand so the deal seems more about bringing Amazon's scale and expertise - especially in analytics - to bare.
Online delivery of groceries so far has been tough for any company to pull off because of customers' concerns about the quality of meat and produce, Wedbush Securities analyst Michael Pachter said.
Amazon, meanwhile, has been expanding its reach in goods, services, entertainment - and groceries.
He said he expects the marketing to begin shortly after the combined company closes the deal in the second half of the year. In the fiscal year 2016, the Company had sales of approximately $16 billion and has more than 460 stores in the United States, Canada, and the United Kingdom.
Whole Foods, founded in 1978, has struggled to differentiate itself as competitors also now offer a plethora of fresh and organic foods.
Amazon has announced it is acquiring upscale grocery chain Whole Foods in a deal valued at $13.7 billion.
Amazon's deal also gives it a brick-and-mortar footprint around the U.S.
But once the deal is complete and WFM is wholly in the Amazon fold, quite a bit is expected to change - and not just on the grocery front.
Then there's Amazon, the online juggernaut that has turned its gaze to food retailing.
But is Amazon turning into a monopoly? That is the eighth Amazon bookstore now open around the US and more are expected in the future. Using a range of sensors, the Amazon app detects what a customer grabs in the store and bills it to his account if he doesn't return it. "It's probably like the flawless match right", Whitney Winchester said.
Madeline Hurley, a grocery analyst with IBIS World, an industry research company, said Amazon will likely revamp Whole Foods' internet presence. The investment firm Jana Partners said in April that it had built up an ownership stake in Whole Foods because it saw ways to address its "chronic underperformance for shareholders". An Amazon spokesman denied any job cuts were planned.
"As Amazon has more resources, they might be able to streamline some efficiencies for Whole Foods, allowing the retailer to offer its organic and more sustainable products at more affordable prices", said Lauren Beitelspacher, a marketing professor at Babson College in xxxxx.
For now, though, Whole Foods cashiers and other employees can take a sigh of relief. So, no - you won't be greeted by robots when you go inside a Whole Foods outlet. "More customers are concerned about price and value, and that has a material impact on profitability".
"Dominant players like Walmart, Kroger, Costco, and Target now have to look over their shoulders at the Amazon train coming down the tracks", O'Shea said.
Grocery shopping - you either love it or hate it.
"These guys just want to sell us, because they think they can make forty or fifty per cent in a short period of time", Mackey told Texas Monthly's Tom Foster. With a $13.4 billion purchase, Amazon is stepping up its game and hoping to get an even stronger foothold in the retail market.
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