Shoppers may see big changes after Amazon buys Whole Foods

Yesterday, Amazon stunned everyone when it revealed that it had agreed to buy out Whole Foods Market for a monstrous sum of close to $14 billion.

Amazon already has made inroads into the supermarket business with its AmazonFresh grocery delivery service and a prototype checkout-free Amazon Go brick-and-mortar store, so far only open to employees.

"The conventional grocery store should feel threatened and incapable of responding", Wedbush Securities analyst Michael Pachter said.

The deal could be "transformative", Moody's lead retail analyst Charlie O'Shea said, "not just for food retail, but for retail in general".

Amazon, meanwhile, has been expanding its reach in goods, services, and entertainment.

The merger of Whole Foods and Amazon is expected to close later in 2017 after gaining approval from US regulators and Whole Foods' stockholders.

Costco: While it's not particularly known to be techie, the company remains the third biggest supermarket chain worldwide, trailing Walmart and Carrefour in France.

Companies in the food business, he adds, are also under attack from another recent entry into the US grocery pace, German grocer Lidl.

Combining the two companies will give Whole Foods not just a cash infusion but access to Amazon's massive distribution system.

Shares of competing retailers Kroger Co., Target, and Walmart all fell Friday after the deal was announced, while Amazon shares were up by 2.4 percent. The deal comes just months after Walmart's $3.3 billion purchase of Amazon competitor "Whole Foods' online grocery channel is operated by Instacart, which will likely not be the case for long if the acquisition is approved". It seemed unlikely that Instacart would hold on to its agreement to deliver for Whole Foods, soon to be owned by its goliath rival.

"They (Amazon) always try to offer the best price, which is good for the customer, but not good for the brand", Motkin said.

Amazon is considering extending the cost-cutting effort with the no-checkout technology it's developing at its Seattle convenience store, "AmazonGo", according to the person familiar with the matter, who asked not to be named because the plans are private. It was recently granted a patent for technology that would block shoppers from comparing prices using their mobile devices while they are in stores.

Amazon got through the upscale grocer's checkout line first. "It's probably like the flawless match right", Whitney Winchester said.

Despite this announcement, there remains the small matter of getting the approval of shareholders of World Foods Market as well as regulatory approvals before the deal can be finally closed. That could change if Amazon not only cuts operational costs but passes those savings onto customers. "More customers are concerned about price and value, and that has a material impact on profitability".

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