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Amazon to buy Whole Foods for USA $13.7 billion

Amazon to buy Whole Foods for USA $13.7 billion

E-commerce and cloud computing giant Amazon will be shelling out Dollars 13.7 billion to buy American supermarket chain Whole Foods Markets making it its largest ever acquisition, the company announced last week.

June 16, 2017, Amazon announced that it was acquiring Whole Foods Markets and its approximate 440 stores just throughout the United States.

Wedbush Securities analyst Michael Pachter lent weight to that theory.

As O'Shea said, the ramifications of the two deals will be "not just for food retail, but for retail in general".

Viewed over the long arc of Amazon history, Whole Foods seems like an unlikely fit. It announced Friday that it's buying online men's clothing retailer Bonobos for $310 million, following a string of online acquisitions including ModCloth and Moosejaw.

A year and a month later, Amazon introduced its version of a friction-less physical shopping experience called Amazon Go which leveraged technology and AI to make waiting in queues redundant.

Amazon has experimented with the occasional pilot bookstore or grocery store in the past. Amazon recently introduced Amazon Cash, which allows customers to load funds to their Amazon account at various brick-and-mortar partners like drug stores and gas stations.

It is also expected that Amazon could shave off a few margins from the Whole Foods business to offer cheaper groceries and disrupt the market.

"This store has become a money-making machine", said Tony Castro, a 40-year-old private chef, who shops daily in Whole Foods' sprawling downtown Los Angeles store. If we look closely at what O'Shea said, the statement dovetails with the current rival notes between Amazon and Walmart.

"It's amusing. I was just ordering something on Amazon", said Nick Yezierski, a hotel manager who was eating breakfast outside the Whole Foods flagship store in Austin, Texas.

Architect of Germany's reunification ex-Chancellor Helmut Kohl dies
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Amazon declined comment on competition with Walmart but spokesman Drew Herdener said in a statement the company has no plans to cut jobs or use technology in development at its Seattle Amazon Go store to automate jobs of cashiers. Under this agreement, WFM would continue operating its stores under its name.

In the short-term, said von Massow, it's unlikely Amazon will steal customers from other Canadian grocers. Whole Foods itself has a well-established brand and high-income demographic that maps well to Amazon's own customer base, and in particular its Amazon Prime subscription service, with an estimated 80 million members.

In Jackson, Mississippi, 59-year-old Deborah Sullivan says she does order some items online, but when it comes to clothes and food, she prefers to touch and feel the items.

However, Amazon has been signaling its interest to enter the food industry.

The biggest player in the fragmented market is Wal-Mart with 14.5 percent, with Kroger second with 7.2 percent. The deal also assumes Whole Foods' net debt which makes the deal $13.7 billion. Pachter said Amazon might get customers over those fears if they know the delivered items are the same as those they would find at the local store.

If Amazon can combine online prescription ordering and fulfillment with in-store pickup, it could provide another great source of sales at Whole Foods stores, while also giving Amazon an entirely new source of revenue.

"Instead of deliver to my home, why not just come down here?"

Adrienne Anderson, at a Whole Foods in Savannah, Georgia, says she shops at Whole Foods nearly exclusively for meat and fresh produce "because of the quality and selection" and because fruits and vegetables are locally sourced.

Walmart is testing out same-day grocery delivery from 10 of its stores.


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