Amazon has announced it is acquiring upscale grocery chain Whole Foods in a deal valued at $13.7 billion. Note, though, that one of its investors as well as partners is Whole Foods, either shaping Amazon to be a shareholder or Instacart as an acquisition target itself.
"We will continue to operate our stores and deliver the highest quality, delicious natural and organic products that you've come to love and trust from Whole Foods Market", Whole Foods told customers. "Whole Foods Market has been satisfying, delighting and nourishing customers for almost four decades - they're doing an fantastic job and we want that to continue".
A crowded local grocery market became more interesting - and probably more competitive - as online retail powerhouse Amazon announced Friday that it will buy organic foods specialist Whole Foods, which now has stores in Washington Twp., Mason and Cincinnati.
The company, which had sales of almost $136 billion in 2016, accounted for 43 percent of online retail sales in the United States past year, according to Slice Intelligence, a San Mateo firm that analyzes e-commerce trends. The deal is expected to close later this year. They have included well known names across many sectors: Gymboree, Sports Authority and Payless Shoes have all filed for bankruptcy within the previous year.
Apparently longtime CEO John Mackey will stay the CEO and the headquarters will stay in Austin. The giant retailer sells the most groceries than any other retailer.More news: Gun salute for Lashkar-e-Taiba terrorists killed in south Kashmir
"It potentially turns these brick and mortar stores into distribution centers", Olson said.
Amazon shares rose 23.5 percent Friday after the deal was announced.
It's also been testing automation technology at a Seattle convenience store that's now open only to Amazon employees.
Marc Perrone, head of the United Food and Commercial Workers International Union, which represents millions of grocery workers, said that Amazon's "brutal vision for retail is one where automation replaces good jobs". "If shoppers are going to allow a company, a retailer, to pick their meat, their produce and their seafood, Whole Foods is probably at the top of the list of retailers with the best reputation across the country".
Peter Belanger of Newington calls himself an "Amazon person" who uses two Kindles, but said he and his wife will not likely shop the internet for food. It will take over a natural and organic grocer pioneer with 456 stores, a mecca for young, high-end shoppers, that has been struggling to rein in prices and integrate technology.
Pachter said that even if Amazon gets 20 million members of its Prime loyalty program to pay $15 a month extra for AmazonFresh grocery-delivery service, that's 20 million not going to traditional supermarkets. However, Whole Foods does not have access to Instacart's financial numbers and analytics.