Is the Whole Foods acquisition the beginning of Amazon's endgame?

What the Amazon-Whole Foods Deal Means for Your Grocery Bill

What the Amazon-Whole Foods Deal Means for Your Grocery Bill

The merger that shook food and retail stocks on Friday - Amazon.com Inc's proposed deal to buy Whole Foods Market Inc rattled some employees of the upscale grocery chain who expressed fears ranging from layoffs to the loss of their laid-back corporate culture.

The online retail giant's surprise acquisition of Whole Foods comes at a time when Amazon has been inserting itself into the grocery market, and Whole Foods had been cutting prices.

The announcement of the takeover last week caused shares in other major US retailers including Target, Costco, and Walmart to plunge, as the 460 Whole Foods storefronts in the US, Canada, and United Kingdom become Amazon's.

Whole Foods is part of the "crème de la crème of the supermarket industry" and is a "hand-in-glove fit" with the educated, relatively affluent demographic of Amazon customers who pay $99 a year for the site's Prime membership that includes free shipping, video streaming and other services, Greif said.

"One of the things they do better than us, they are more customer-centric than we are", Mackey said of Amazon in the town hall meeting.

The Amazon-Wholefoods deal leaves a bad taste in the mouths of local grocers.

Over the years, critics of Whole Foods sardonically coined the nickname "Whole Paycheck", highlighting the steep prices of its high-end, organic fare.

In a lengthy profile by Texas Monthly, he says that Goldman Sachs CEO Lloyd Blankfein was eager to court his business when Whole Foods first came under pressure from an activist investor to look for a takeover. In fact, the footprints of Amazon and Whole Foods are strikingly similar in many respects. Amazon says the company has no plans to use such sensors to automate the cashier jobs at Whole Foods, which Amazon is acquiring.

"We admire the quality standards of Whole Foods".

Tracking shopper data to offer more targeted deals is seen as a critical advantage in the competitive grocery industry.

As sales declined at established locations, Whole Foods recently said it was hitting the brakes on expansion and that it no longer saw potential for 1,200 locations.

"From that, and depending on what they learn, we could see a strategy emerge in other realms, for example food manufacturing", she says.

"Amazon is known to scale experiments very quickly".

According to Kantar, a big global research firm, buying a bricks-and-mortar chain is a "tacit admission from Amazon that food retail is incredibly hard as a pure online player", according a report in the Financial Times.

And while New York City's retail players stressed they didn't have a crystal ball into Jeff Bezos' thinking, they said it's probably a little bit of both - Amazon is likely to apply its omnichannel expertise to the grocer while using its enviably-located stores to expand its own brick-and-mortar operations.

Whole Foods used to be one of the leaders in organic and natural foods, but other chains have increased the availability of those products.

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