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Whole Foods CEO calls deal with Amazon 'whirlwind courtship'

Jun 27 2017

Whole Foods stock surges past Amazon's offer as investors bet rivals will start bidding war

Specifically, that means more of Amazon's own private-label grocery products in the grocery aisle, according to Bloomberg. But Whole Foods has lost market share to rivals Kroger Co, Wal-Mart Stores Inc, Costco Wholesale Corp and others that have elbowed into the natural and organic segment Whole Foods pioneered. Turner estimates that Amazon could offer $55 a share for Grubhub-a 22% premium to Grubhub's Friday trading price. He expects Amazon to put pressure on grocery stores to lower prices. Plus, he wrote, Grubhub's delivery infrastructure could be applied to groceries. What the online retail behemoth is planning with the Whole Foods deal and its 460 brick and mortar locations throughout the US, Canada, and the United Kingdom is anyone's guess, but as Business Insider points out, this may be a pivotal step in the future of grocery shopping. Amazon shares rose as much 3 percent and were still up 0.6 percent at $993.17. Amazon knows this, and its acquisition of Whole Foods is among other things an acknowledgment that the e-commerce giant needs a brick-and-mortar footprint to compete in the grocery space. Carmen Clark, 37, a six-year employee at a store in Mount Pleasant, South Carolina, said some workers worry that Amazon-led automation could lead to job cuts.

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.

Photo by David Ryder / Stringer / Getty Images. Whole Foods itself had launched an offshoot chain named after its "365" private label brand in a nod to the popularity of no-frills chains.

"I dreamed that we merged with Amazon".

The knee jerk reaction from the Amazon bid for Whole Foods in the USA hit the Australian market as suspected, with brokers analysts and others sprouting all sort of nonsense and rubbish about what it means down under. And we're only talking about groceries, that brings us to the next point.

"From that, and depending on what they learn, we could see a strategy emerge in other realms, for example food manufacturing", she says. Short term, Amazon is trying to get a stronger foothold in the grocery business but what happens after that is still anyone's guess.

Now that the companies have announced their tie-up, Mackey went on to say he is completely over the moon about Amazon. But based on Mackey's stirring testimony, it would take an terrible lot to make star-crossed lovers out of Amazon and Whole Foods.

Pachter said Amazon was likely to increase spending to build its online grocery business over the next several years, so the acquisition would add only slightly to earnings while boosting revenue significantly. "We will look back on this day, a few years from now".


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