Amazon. Investors like the deal and think it will be good for the online retail giant, which has been expanding its grocery offerings.
"This deal should leave no doubt that Amazon is deadly serious about dominating all aspects of retail", Cuatrecasas said.
Whole Foods is among Instacart's most significant food retailers, realizing sales through the service in excess of $200 million in 2016, which helps the service scale cost-effective delivery across dozens of other grocers and retailers that also participate in the service.
Analysts are already imagining the possibilities: Amazon has access to all those physical Whole Foods locations while Whole Foods (which is keeping CEO John Mackey and its name) has access to Amazon's tech and logistical smarts.
"Whole Foods shareholders will only receive $42.00 per Whole Foods share owned".
Amazon's move is a threat to supermarket chains like Kroger, fresh produce retailers like Sprouts Farmers Market, big-box retailers like Walmart and Target that have moved aggressively into groceries, and companies like Costco that sell bulk products, including food, at discounted prices. Initially an internet bookshop, Amazon began delivering non-perishable food items like cereal and soup in 2006, prompting derision from the grocery industry.
Amazon has experimented with the occasional pilot bookstore or grocery store in the past.
It's also been testing automation technology at a Seattle convenience store that's now open only to Amazon employees. The app would then have automatically charged whatever products they took out of the store with them to their Amazon account. Sprouts also has announced plans to more than double a current 10-store e-commerce business through a partnership with Amazon Prime Now.
Whole Foods, founded in 1978, is widely credited with helping to make organic food go mainstream.
But Amazon's not going away and that will incite change, he said. Whole Foods is expensive AF, yes. For customers, this could mean better prices and delivery options.
"Generally speaking, there is very little overlap between these two companies", Carrier said to The Wall Street Journal.
Neil Saunders, managing director of GlobalData Retail, said the deal should give the grocer financial breathing room, while making it more competitive online and improving its supply chain logistics. These are likely to be higher income households that traditionally spend the most on cuts of meat and buy expensive brands.
The announcement has sent traditional grocery stores and chains such as Target and Walmart scrambling. The organization will likewise stay situated in Austin, Texas.
Awaiting approval from Whole Foods Shareholders, the acquisition is expected to be completed during the second half of 2017.
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