Amazon declined comment on competition with Walmart but spokesman Drew Herdener said in a statement the company has no plans to cut jobs or use technology in development at its Seattle Amazon Go store to automate jobs of cashiers.
"They are on offense and that is a good position to be in", Binder said, referring to Wal-Mart.
The deal could be "transformative", Moody's lead retail analyst Charlie O'Shea said, "not just for food retail, but for retail in general".
Shares of dozens of supermarkets, food producers, payment processors and shopping malls collectively lost at least $35 billion in USA market value on Friday as the news reverberated across financial markets. Kroger, which had been rumored late previous year to be considering a takeover of Whole Foods, was down 14 percent. It announced Friday that it's buying online men's clothing retailer Bonobos for $310 million, following a string of online acquisitions including ModCloth and Moosejaw. The top 10 grocery retailers plus Amazon control less than half of the market, Blackledge says, and a patchwork of several hundred grocery chains, convenience stores, dollars stores as well as mom and pop stores make up the remainder.
"Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy", said Jeff Bezos, Amazon founder and CEO. It comes out to roughly $42 a share - a 27% premium on its closing price on Thursday. To put the Whole Foods purchase price into some kind of context: Sainsbury's is now valued at £5.5bn and has over 1400 United Kingdom stores. Eleanor McCarthy, who said she lives "near Newburyport", has a son who works for Amazon in Los Angeles.
Most retail analysts predict the shopping experience at Whole Foods will change enormously, spurring change at other grocers, too. The stores could teach cooking skills, hold classes and educate about food.
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The deal comes after Seattle-based Amazon spent almost a decade trying to find a way into the fresh-food delivery business through various endeavors, without much success.
For now, the Amazon-Whole Foods deal seems unlikely to change much.
Minutes after Amazon announced the Whole Foods deal, Instacart's name also popped into Twitter's trending topics as a brief moment of schadenfreude took hold. Whole Foods chief executive John Mackey would remain CEO after the purchase and the company would keep its headquarters in Austin, Texas. "Usually acquisitions are about financial extraction from a business, but this was a brilliant bypass around Jana, an activist investor". (NASDAQ:WFM) in a deal valued at around $13.7 billion. The acquisition price implies a trailing 12-month price-to-earnings multiple for Whole Foods of 31 times, versus a 14.4 average for the S&P 500 Food Retail index.
Yes. The world's largest e-commerce company is now a very substantial brick-and-mortar food retailer.
Both Amazon and Whole Foods cater to younger consumers including millennials as well as the affluent. At some of the Whole Foods 365 locations, the grocer's discounted brand, consumers can use iPads to order food or find a bottle of wine.
Goldman Sachs Group Inc advised Amazon on the deal and provided bridge financing.