Whole Foods CEO hints at another brand under Amazon

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Whole Foods CEO John Mackey says the company will evolve under the management of Amazon.

Amazon's bid to buy Whole Foods isn't actually a threat to Walmart at all, but just an indication of the Amazon's recognition that it would never be able to scale its food business without a brick-and-mortar presence, he said.

Questions are being raised about how Amazon's ownership may change staff numbers, wages and shelf prices at Whole Foods - including at its nine United Kingdom stores - given the online retail giant's interest in using in-store technology to ramp up automation.

FILE - In this Friday, June 16, 2017, file photo, groceries from Whole Foods Market sit in a cart before being loaded into a auto, outside a store in Jackson, Miss. After a decade of selling groceries online, Amazon did not make a major dent, as consumers are stubborn about buying items such as vegetables, fruits and meat in person.

The deal for Whole Foods Market Inc., which people familiar with the matter said came together quickly, presents Amazon with several potential gains.

Expect Whole Foods to move closer to automated payments when Amazon takes over, which should save the company money and make the customer experience faster and more convenient.

A representative for Whole Foods confirmed that Amazon CEO Jeff Bezos was at the meeting. "It's too early to talk about how benefits and compensation may synch up", Mackey said of the topic, after jesting that Whole Foods employees will get free Amazon devices on merger day. After all, as Mackey said in the press release about the deal, the acquisition is "an opportunity to maximize value for Whole Foods Market's shareholders, while at the same time extending our mission and bringing the highest quality experience, convenience and innovation to our customers". The company has gained the moniker "Whole Paycheck", and when the deal was reported many joked on Twitter that the price was nothing for a Whole Foods shopper.

He also expects that Amazon will demand lower prices from food manufacturers than Whole Foods has. In addition, Whole Foods is the market leader in the natural and organic foods supermarket. Whole Foods now partners with, and is also an investor in, Instacart, and it's unclear what will happen to that partnership once Amazon takes over. Amazon can use Whole Foods stores as a staging ground for its own AmazonFresh deliveries, or a combined delivery program. The consulting group is analyzing the changes that Whole Foods can embark on to cut cost while also improving its customer service.

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The company has doubled the number of Neighborhood Market stores to 700 over the last three years. "They put the customer first in everything they do and think backwards".

John Mackey, CEO of Whole Foods Market, is a member of The Motley Fool's board of directors. So he doesn't expect that a Whole Foods owned by Amazon would stop buying locally produced food. The Motley Fool has a disclosure policy.

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