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Could there be a bidding war for Whole Foods?

20 June, 2017, 13:03 | Author: Mae Harvey
  • UK supermarket shares are recovering after Friday's Wholefoods shock

However, with the acquisition of Whole Foods, Amazon has confirmed that it plans to be a serious player in this segment. Online grocery remains at around 2 percent in the U.S. despite 20 years of investment.

Amazon had looked at Whole Foods a year ago but initially decided not to make an offer.

Whatever happens this much is sure: Buckle your seat belts because it's going to be a wild ride in retail at the grocery store!

While Wally's been trying to catch up in the the digital department by acquiring hip online clothing brands, Amazon is coming in hot from the other side of the fence - growing from an online model to having a physical retail presence across the country. Both the companies know that the future of shopping will be a curious mix of both e-commerce and physical retail. In our view, the stock pressure reflects justified investor concern that competitive pressure in the grocery space may intensify with the added long-term threat of Amazon taking a significant position in the space.

Whole Foods now has 431 stores nationwide ― and it is a beloved option for organic produce and local products already.

With its purchase of Whole Foods Market, Amazon is hoping to compete with Walmart, the world's biggest retailer. After all, investors made it clear on Friday given the strong sell-off in grocery stocks across the board that even the biggest and strongest grocers, like Kroger, could be at the mercy of Amazon's price wars.

Your weekly box of Amazon groceries could also contain your Monday-through-Friday work lunches - or dinner for a few days. Sprouts has about 270 locations in 15 states. Another concern is there's a substantial amount of overlap in the shopper bases of Costco and Amazon, according to analyst Stifel, Nicolaus & Co. Groceries are a key driver of traffic at Wal-Mart's stores, and the company is working on several ways to ensure that customers continue to visit its outlets for groceries. However, he also assured that the acquisition in no way would undermine the quality of the products, and the experience that the consumers have been enjoying till date.

There's a great overlap between Prime members and the typical Whole Foods WFM, +1.27% customer, experts say.

Amazon's ground game has been very light overall, but will be extended if and when the company's $14 billion acquisition of the Whole Foods supermarket chain closes. "Retailers need to take note and ensure that they too are providing their customers with the relevant channels for their shopping needs and not run the risk of freezing out customers for failing to do so".

Technology will replace the cashier jobs at Whole Foods, using sensor technology that's being pioneered at the experimental Amazon Go store concept in Seattle, according to the report. Still, it's the kind of technology that could help cut costs down the road, and that others may look to as well.

The founder, chairman, and chief executive officer (CEO) of Amazon.com Jeff Bezos, is just $5 billion shy of overtaking the world's wealthiest person, Bill Gates.


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