Published: Сб, Июня 17, 2017
Industry | By Dora Warner

Amazon's purchase of Whole Foods already impacting grocery industry

Online juggernaut Amazon is buying Whole Foods in a deal valued at about $13.7 billion, a strong move to expand its growing reach into groceries. A prototype grocery store called "Amazon Go" opened previous year in Seattle, Washington.

The high-end American grocer is planning to operate its network of stores under the same brand, and maintain its current executive team.

Whole Foods opened its University Place store in 2015. You're looking at Wal-Mart being down, look at Kroger being down. "Whole Foods Market has been satisfying, delighting and nourishing customers for almost four decades". The stores that Whole Foods now operates will continue to operate under its own name and its current CEO, John Mackey, will stay CEO of the company.

Trading of Whole Foods shares was halted, while Amazon rose 2.0 percent to $983.40 in pre-market trading. Supermarket chains also took big hits, with Kroger, whose shares tanked Thursday on a profit warning, tumbling 9.2 percent and Supervalu falling 14.2 percent.

Amazon's philosophy has been hard on many of its retail competitors, who have closed their doors in part because of online competition. "More and more we will see Amazon brand products as they work to create their own brand at retail".

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Kristin Mullins, president and chief executive of the Ohio Grocers Association, said her first question about the Whole Foods acquisition was: What does the move mean for the number of traditional "brick-and-mortar" physical stores in Ohio? From amusing observations to skeptical outlooks, here's what Twitter users have to say on the matter.

On Friday, Wal-Mart said it would buy Bonobos, a popular internet apparel retailer; a year ago, it acquired Amazon competitor and appointed that company's chief executive, Marc Lore, to strengthen its e-commerce operation.

The Whole Foods deal is expected to close in the second half of 2017, pending shareholder and regulatory approvals.

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". Walmart has boosted its grocery business and private companies like Trader Joe's have also offered tough competition.

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