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Amazon steps into physical retail world in a big way with Whole Foods Market acquisition

By Jos · 8 replies
Jun 16, 2017
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  1. Amazon has announced it’s come to an agreement to buy Whole Foods, the organic-food store chain for $42 a share. Amazon's offer represents a 27 percent premium to Whole Foods' closing price on Thursday, and values the deal at a whopping $13.7 billion, making this the biggest transaction ever for the e-commerce giant as it pushes deeper into the groceries business.

    The comes deal as Whole Foods has been trying to fend off pressure from shareholders frustrated by a sluggish stock price. Back in April, activist investor Jana Partners took an 8% stake in the company and pushed the board to look into strategic options including a sale.

    Amazon, on the other hand, has been expanding beyond online retail into physical stores. The company has opened about 10 brick-and-mortal bookstores and even more pop up stores at shopping malls throughout the country. It’s also testing a variety of retail concepts, including convenience store that does not need cashiers, and a drive-in grocery service that delivers online-placed orders straight to your trunk.

    This is by far Amazon’s most ambitious move into physical retail. By acquiring the grocery chain, known for its health-first approach to food, the online retailer will get 460 stores in the US, Canada and the UK. Whole Foods Market will continue to operate stores under its own brand name.

    "Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy," Amazon CEO Jeff Bezos said in a press release. The companies expect the deal to close in the second half of the year.

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  2. This marks the beginning of the end of traditional retail food. Amazon will do to Publix, Kroger, etc. what they did to everyone else.
     
    Reehahs and dms96960 like this.
  3. dms96960

    dms96960 TS Guru Posts: 322   +77

    Amazon will do to them what Walmart did to everyone else.
     
    Reehahs likes this.
  4. Walmart is one of Amazon's "victims." Walmart took out mom and pop shops, discount retailers, that sort of thing. Amazon kills big companies. Think of it as...a corporate megalodon.

    [​IMG]
     
    merikafyeah, Kenrick and Reehahs like this.
  5. wiyosaya

    wiyosaya TS Evangelist Posts: 4,118   +2,406

    My experience is that when good companies, not that Whole Foods has not had its problems, get bought out like this, they are usually destroyed. Hopefully, Amazon will not trash what Whole Foods brought to the grocery market.
     
  6. stewi0001

    stewi0001 TS Evangelist Posts: 2,219   +1,657

    The future!
    [​IMG]
     
    Reehahs likes this.
  7. Evernessince

    Evernessince TS Evangelist Posts: 4,080   +3,614

    Amazon was able to take a bite of those companies because they sat there and watched as amazon changed the retail landscape.
     
  8. dms96960

    dms96960 TS Guru Posts: 322   +77

    Very interesting article in the Wall Street Journal:
     

    Attached Files:

  9. They didn't just sit there and watch. They've been trying to play catchup for years. Problem is, Amazon has a much more refined supply and distribution network than they do. There's no way most of these companies can upend and rework their business fast enough to keep pace with a specialist organization like Amazon.
     

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