Whole Foods CEO calls deal with Amazon 'whirlwind courtship'

Costco's $4.99 rotisserie chicken is symbolic of its price leadership in the industry Cowen said.   Wikimedia

Costco's $4.99 rotisserie chicken is symbolic of its price leadership in the industry Cowen said. Wikimedia

"Grocery has been pretty insulated from e-commerce to this point", Giammona says.

"Kroger would have to pay in stock, and their stock has been hurting", giving them less leverage to get into a protracted bidding war with Amazon, Culpepper said. "What happens when a machine bruises a piece of fruit and a customer is dissatisfied?" That's because while online grocery sales are rapidly growing, according to the Food Marketing Institute and Nielsen, they're still only going to account for 20% of the market by 2025.

Becoming a bigger player in the grocery space is a logical ambition for Amazon as the market is a $600bn a year business.

In the USA "this adds 440 refrigerated warehouses within 10 miles of probably 80 percent of the population", said Michael Pachter, an analyst for Wedbush Securities. Amazon invested in refrigerated distribution centers to hold items. That's a blow to rivals like Target and Wal-Mart, which boasted that physical as one thing they had over Amazon.

"Mingling with the people in the city - you do that when you're in the grocery store", said Patricia Merrill.

Amazon.com, Inc. (NASDAQ:AMZN) would acquire Whole Foods in an all-cash transaction valued at $13.7B.

However, Amazon has been signaling its interest to enter the food industry.

Amazon is expected to be disruptive to all retailers when it enters Australia, and could lead to a faster push in food delivery and lower prices.

"Consumers want to know what they're getting and putting in their bodies", said Madeline Hurley, a senior analyst at market research firm IBISWorld.

To that end, Amazon is encroaching on territory long dominated by the likes of UPS, FedEx and the U.S. Postal Service.

Amazon has not yet released its specific strategy.

"It's like Amazon is taking over the world", she said.

That could be bad news for Costco, whose shares slid as much as 3% in trading Monday. "We need to evolve".

We hope you're listening, Bezos.

Whole Foods has been pressured as a key sales figure has declined.

Wedbush argued that Grubhub would be a nice compliment to Whole Foods because the food ordering company has a similar geographic overlap and similar customer and diner demographics.

Mackey stressed that he will stay on as CEO, that Whole Foods' headquarters to remain in Austin rather than shift to Amazon's hometown, Seattle, and that numerous company's core values will stay the same.

"Look at companies in the sharing economy".

A representative for Whole Foods confirmed that Amazon CEO Jeff Bezos was at the meeting.

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

In February, a source told The New York Post that "Amazon will utilise technology to minimise labour" at new, machine-automated supermarkets that could operate with as few as three employees.

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