Published: Wed, June 21, 2017
Business | By Max Garcia

Speculation grows that Amazon will face a rival bidder for Whole Foods

Speculation grows that Amazon will face a rival bidder for Whole Foods

On Friday Amazon announced its intention to acquire Whole Foods Market, a supermarket chain with more than 460 stores across the US, Canada and the United Kingdom, for $13.7 billion.

In a town hall meeting at Whole Foods' Austin, Texas, headquarters on Friday, the day the deal was announced, Mr. Mackey and other executives applauded the "historical moment" for Whole Foods, saying that the two companies hit it off right away, according to a security filing transcript. News of the acquisition sent Amazon's share price up 3.5 percent while shares in other supermarkets dropped, clearly spooked by the news, including Walmart and Tesco dropping six percent each. It has spent several years lowering prices and focusing on fresh produce in a bid to thwart giant Wal-Mart Stores Inc., which generates more than half of its revenue from groceries. The company spent over four years planning the cashier-less market and despite a few technical difficulties, an 1,800 square foot prototype is now open to Amazon employees in downtown Seattle.

The Whole Foods chief said Amazon's technology will help the grocer transform from "class dunce" into "valedictorian". He noted that Amazon was known for its innovation.

Turner noted that Whole Foods has large store footprints in most of GrubHub's key geographies, including California, Massachusetts, Illinois and NY.

Mackey isn't saying the company's almost 90,000 employees are about to take a hit, but he's been very frank that there will be changes.

"I'm thinking I want much of my philanthropic activity to be helping people in the here and now - short term - at the intersection of urgent need and lasting impact", Bezos tweeted Thursday. Already the behemoth of online retailers, Amazon will now dramatically expand its physical presence, courtesy the 460 Whole Foods stores worldwide. And in a nod to the popularity of delivery companies like Blue Apron, Kroger and Whole Foods have been testing meal kits as well. By acquiring Whole Foods, Amazon now owns a familiar name with a lot of value in the market. Whole Foods is also among its partners, though the fate of their five-year contract may now be up in the air.

Giammona says there is some concern among "hard-core Whole Foods fans" that Amazon could change the grocery's image and product options.

Kroger has been investing in so-called "click-and-collect" technology, which allows customers to order online and pick up their groceries at a store.

The US$13.7 Billion deal is the largest yet for Amazon, a whopping 70 times larger than its other 70 deals combined, and experts say that when Amazon arrives in Australia, it could happen here too.

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