"Amazon is really is trying to get into the grocery market, and they're not only looking to do that online, but they're looking to do that in the traditional retail brick-and-mortar market", Hurley said in an interview. Whole Foods already has a lot of in-store dining and lots of prepared foods.
Amazon's acquisition of Whole Foods Market sent the stocks of grocery store operators and other companies that compete with Whole Foods plunging Friday. Right now, Ahold's stock is down by almost 10%. Walmart and Target also took significant hits. But online delivery of groceries has been tough to pull off.
Ladd, who left Amazon in March, said Amazon will seek to eliminate checkout lines by using technology that automatically scans goods as customers add them to their shopping carts.
The company, which had sales of almost $136 billion in 2016, accounted for 43 percent of online retail sales in the United States a year ago, according to Slice Intelligence, a San Mateo firm that analyzes e-commerce trends.
In the US "this adds 440 refrigerated warehouses within 10 miles of probably 80% of the population", said Michael Pachter, an analyst for Wedbush Securities.
And because customers can buy foods and bulk items like toilet paper from a single retailer, discount retailers such as Costco, Target and Walmart should feel threatened, too. "It still has the option to stand up its own Amazon-branded stores from the ground up". On Friday, WalMart announced it is buying men's online clothing retailer Bonobos for $310 million.
The online retailer hopes the $13.7 billion acquisition helps it disrupt the grocery business and expand its real-world store footprint.
Whole Foods, founded in 1978, has more than 460 stores in the United States, Canada and the United Kingdom, employs 87,000 people and is the leading natural and organic foods supermarket. Expanding into the grocery market would not only bring profits to Amazon but a room for great expansion.
"For other grocers, the deal is potentially terrifying", Neil Saunders, managing director of GlobalData Retail, wrote in a report released Friday.
"The quality will give to provide a cheaper price to consumers", said Whole Foods Shopper Hamid Fhehollahi.
"If they actually, Amazon Prime, decides to deliver food to your home, boy that's great, it would be a wonderful thing!"
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.
Saunders suspects that Amazon will try to get food suppliers to lower their prices, impacting companies that both make and distribute food. "It's probably like the ideal match right", Whitney Winchester said.
Amazon is buying Whole Foods. Target Corp.'s stock fell to $50.30, down more than 9 percent. "If there ever was a time crunch, I'd consider it", he said.
John Mackey will remain CEO of the company. The deal is expected to close in the second half of 2017.
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