Amazon acquires Whole Foods

Amazon acquires Whole Foods

Take two queen bees and put them in the same hive, and what do you get?

Inc.'s $13.7 billion bid for Whole Foods Market Inc. sent shock waves across the retail industry: Investors and rivals suddenly had to ponder how quickly the dominant online merchant might turbocharge a struggling chain, known for pricey hand-butchered meats and $30 emu eggs, to challenge USA supermarket leader Wal-Mart Stores Inc. Buying Whole Foods hardly gives Amazon a stranglehold on food and drink: the combined companies will account for just 1.4% of America's grocery market, according to GlobalData, a research firm. "The combination has generated some outsized coverage". Wal-Mart, which has the largest share of the US food market, has been working on lowering prices, while Target has been struggling to turn around its grocery business. The industry has "stubbornly stayed offline" in the past few years, according to Sucharita Mulpuru, Chief Retail Strategist at Shoptalk, and Amazon hasn't successfully overcome the issue.

There are numerous reasons why a Kroger bid for Whole Foods makes sense. "This disruptive and destructive battle between two of the nation's leading low-road employers like Amazon and Wal-Mart can only mean bad news for workers, and ultimately consumers, who in the future will nearly certainly be faced with fewer options and no real competition in the retail and grocery industries".

In an update thesis, Justin highlighted that Amazon has numerous opportunities ahead in new categories and geographies, however, prioritizing remains the key moving forward.

Amazon launched a $13.7 billion bid for grocery chain Whole Foods Market Inc last week, marking its intention to take on Wal-Mart.

"The possible effects on Whole Foods alone are interesting to contemplate", Mr. Maute said. The White House did not answer an email I sent asking about the president's campaign statement and what it might mean for the Amazon-Whole Foods deal.

According to a 2015 USDA survey, about nine out of 10 USA households use their vehicles to go grocery shopping, driving an average one-way distance of four miles to get to a preferred store.

WCPO Insiders will learn how Kroger's history with Walmart prepared the company for its next big challenge.

Publix is also trying to force its way more into the online market recently by collaborating with Instacart.

Wal-Mart and Amazon and did not immediately respond to a request for comment. Over the last few years, Amazon and Walmart have begun encroaching on each other's respective territories, becoming the other's main competitors in many ways. They are Ahold Delhaize, Kroger, Supervalu and Weis Markets. In contrast, Whole Foods is intimidating to customers seeking affordable prices: they have a strong brand, but also high prices.

That's "a little bit unusual", Springer said, and it probably reflects investors' concern about retail giant Amazon's potential impact.

Amazon is known for being disruptive across varied markets. For infographics, tables, charts and other visuals, follow Packaged Facts on Pinterest.

"I have no idea what they plan to do", said Livingston, referring to the financial consultants who will set the Publix stock price. The company has given birth to a whole bunch of new stuff, but the old stuff is more or less intact. Also, the company hasn't made a significant acquisition in years, preferring instead to focus on its own stores' growth and development, from its ClickList services to technology and new formats.

Livingston and Springer said that's still a viable strategy.

"No doubt it's a big deal; it's a large amount of money", Harinarayan said. That's right - they think these 10 stocks are even better buys.

"There has been no best-in-class grocer or retailer that doesn't have a best-in-class supply chain and fulfillment operation", said Goor in an interview with Retail TouchPoints.

It's an argument I buy when it comes to traditional grocers. But they still need to strive for improvement.

Publix may even benefit by being cautious about expansion, Livingston said. He said it is important to consider the transaction through the prism of other major changes in the retail marketplace.



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