JEFF BEZOS does not like sitting still. "Followed by death." Competitors are toiling to avoid the same fate but it is hard to keep up. Even with the addition of Whole Foods, Amazon accounts for just 4% of USA grocery/consumables sales ($45 billion) compared with Walmart/Sam's 18% share ($228 billion), with Kroger at 7%, and Costco and Albertson's/Safeway each at 4%. Most importantly, selling food is another way for them to attract and retain customers, especially if tied to the Amazon Prime subscription service. On the surface, this acquisition may look odd, but Amazon acquiring troubled Whole Foods is more than timely for both companies. Now experts say buying Whole Foods puts pressure on the $800 billion grocery store industry.
Amazon is used to spend a lot of money on research and innovation, something traditional supermarket chains are unable to do with their razor-thin margins. They are unusually wealthy and well-educated (see chart).
Whole Foods' website said it only sells products "that are free of artificial preservatives, colors, flavors, sweeteners, and hydrogenated fats".
That Amazon is known as a disruptor and "industry-killer" is one thing, however it should be noted that the rise of Amazon has led to the rise of a number of consumer trends which, though now taken as standard practice, would not have arisen without Amazon.
"The acquisition gives CEO Jeff Bezos a weapon to attract a customer he largely already caters to, but if the goal is to fully compete against Walmart, then could Dollar General be next on Amazon's buying list to go after an arguably larger part of the USA population?"
The grocery segment was the only retail segment that the e-commerce giant had not had a foothold in-until now.
In preparation for that price war, Wal-Mart in recent months has cut grocery prices, improved its fresh food and meat offerings, modernized shelving and lighting in its grocery department and expanded its online pick-up service. Prime Now, a two-hour delivery service introduced in 2014, is in 31.
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But online grocery delivery also isn't so great. Peaches bruise. Meat rots.
Toro's firm developed the Avalon mixed-use community in Alpharetta, which includes a Whole Foods.
It is all a huge headache for Walmart. "And Walmart, already the world's largest retailer, also is the world's biggest grocer". "That's a new Walmart".
If Amazon.com Inc hopes to revolutionise grocery delivery, then its bid to buy Whole Foods Market Inc for $13.7 billion (10.77 billion pounds) will be just the start of a long and costly process. When he bought the company, the Post's tech team was little more than a help desk.
Yet Amazon is playing a different, more complex game. When integrated with Alexa, the need for large basket shopping could be eliminated for many consumers. That gives it new data and revenue that help it improve services and offer additional ones.
Lots of shoppers like stores, and lots of merchandise categories benefit from a physical presence: You want to try out the clothes you buy, or you want to compare the iPad's keyboard to Microsoft Surface's.
The waves from Amazon's decision, subject to regulatory approval, of course, lapped the retail world on this side of the Atlantic pretty quickly. Shoppers will have fewer reasons to go elsewhere. The fact that food sales aren't the core of Amazon's business is likely keeping Canadian food retail executives up at night. Finding ways to get more value out of its investments has been key to Amazon's growth. Investors feel the same way, because every other traditional retailer's share plummeted, including those from Walmart and Ahold Delhaize, even though the latter has a decent online player in Peapod. Also, Whole Foods has delivery options in place due to its relationship with Instacart; therefore, this impact on food delivery is uncertain. It could, for example, supply restaurants. Canadian food companies are still trying to build their omnichannel, harmonizing the bricks and mortar approach with their virtual, online space. Yet intervention is improbable. Consider the expansion of discounters like Trader Joe's and Aldi, which sell mostly store brand products, or the growth of names like Costco's Kirkland or Target's Archer Farms.