Will Whole Foods Market, Inc. Keep Its Own Brand Under Amazon Ownership?

Jeff Bezos

Amazon's bid to buy Whole Foods isn't actually a threat to Walmart at all, but just an indication of the Amazon's recognition that it would never be able to scale its food business without a brick-and-mortar presence, he said. Whole Food Market Inc had suffered a huge downfall in their share prices since 2013 when their share prices were at its peak and nearly double of what it is right now.

Regarding "Amazon to buy Whole Foods for $13.7B" (Page A1, Saturday), I'm surprised that this deal was announced without a word of protest from the federal government. "That's their dilemma", said Roger Davidson, who oversaw Wal-Mart Stores Inc's global food procurement and now is president of Oakton Advisory Group. The definition of a horizontal monopoly is a company that dominates various sectors, such as distribution and retail, which Amazon is now attempting to do, leveraging their monopoly in online commerce. Walmart has whole foods stores almost 10 times and Amazon reaching Walmart may not be easy in the grocery market business.

One analyst is even saying rival grocer Kroger should challenge Amazon and make Whole Foods a sweeter offer.

"Both of these areas are very nascent for Amazon and Amazon is still working out how to optimise these so these are very much long-term options for the Whole Foods' base".

Whole Foods' website said it only sells products "that are free of artificial preservatives, colors, flavors, sweeteners, and hydrogenated fats". Unlike workers at other large grocery chains, Whole Foods Market employees are not unionized. After all, as Mackey said in the press release about the deal, the acquisition is "an opportunity to maximize value for Whole Foods Market's shareholders, while at the same time extending our mission and bringing the highest quality experience, convenience and innovation to our customers".

Amazon has spent time experimenting with brick-and-mortar already. Its prices online change constantly to react to competitor moves and other factors like supply and demand, and the company often prices popular items competitively to create the perception that everything it sells is low-cost. I'd expect Amazon to roll those out at all Whole Foods location so that the company can experiment with customer responses to different prices and quickly adjust them as needed. "That's not to say we always do the best job or create long-lasting sales and market, however, we definitely take the forefront when it comes to incubation, so we want to make sure that's our focus going forward". The Motley Fool owns shares of and recommends Amazon and Whole Foods Market.

"We continue to believe that most United States consumers will refrain from buying their groceries online", Moody's said.

But because of the growing number of retailers courting the natural and organic food shopper, some food companies are bypassing Whole Foods. He doesn't expect the Amazon-Whole Foods deal to have a big impact on his company for now.



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