A mazon announced on Friday that it will acquire upscale food market chain Whole Foods for $13.7 billion, giving the online retail giant a stronger foothold into the grocery business. For Whole Foods, the deal represents a chance to fend off pressure from activist investors frustrated by a sluggish stock price as it has faced fierce competition from Costco, Safeway and Walmart, which have begun offering organic produce and kitchen staples, forcing Whole Foods to slash prices. Even with the bigger physical presence Amazon will gain through Whole Foods, it will have far less reach than Walmart and its Sam’s Club warehouse chain, which together account for about 18 percent of the grocery market. After today’s announcement, several people on Twitter joked that between Prime and Whole Foods, Amazon may now account for a majority of some urban Millennials’ discretionary spending. Nicole Navas Oxman, a spokeswoman for the Justice Department, declined to comment about whether its antitrust division saw any issues with the proposed acquisition. The $13.4 billion deal, which does not include net debt, immediately raised questions about whether Amazon’s experiments with automation, like the cashier-less checkout technology it is testing in its Amazon Go store, could eventually lead to job losses at Whole Foods stores. The grocery chain includes more than 460 stores in the United States, Canada and Britain with sales of $16 billion in the last fiscal year. Amazon understands that the most important value in American retail today is what’s is technically known as “consumer convenience” and what is commonly observed as “human sloth.” E-commerce is soaring and food-delivery businesses are taking off because human beings are fundamentally lazy and they don’t want to leave the couch to buy stuff. Either way, it’s good for consumers like myself,” said Di Wu, a New York resident in her early 30s who is a member of Amazon’s Prime fast-shipping club and who shops at Whole Foods at least twice a week. The purchase holds … Whole Foods was losing market share to Kroger,” said Brittain Ladd, who until earlier this year was a senior manager working to roll out AmazonFresh globally. After almost a decade selling groceries online, Amazon has failed to make a major dent on its own as consumers have shown a stubborn urge to buy items like fruits, vegetables and meat in person. In a way, this strategy continues a pattern I wrote about several years ago, which is Amazon following in the footsteps of the last century’s retail behemoth, Sears. It … That’s why grocery stores and restaurants are seeing fewer shoppers and diners passing through their shops, as Americans are ordering more of their produce and meals online. The merger might be even worse news for Instacart, the grocery-delivery service that has had a close relationship with Whole Foods. Drew Herdener, a spokesman for Amazon, said it has no plans to use the Amazon Go technology to automate the jobs of cashiers at Whole Foods and no job reductions are planned as a result of the deal. It will take over a natural and organic grocer pioneer with 456 stores, a mecca for young, high-end shoppers, that has been struggling to rein in prices and integrate technology. Shares of Whole Foods Market rocketed 28 percent on Friday after Amazon said it plans to acquire the grocery store chain for $42 a share, in a deal valued at $13.7 billion. “The ramifications for all of retail are seismic – not just retailers that sell grocery, but for everyone,” Gordon Haskett analyst Chuck Grom said.
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