Amazon is buying Whole Foods in a stunning move that gives it hundreds of stores across the us - a brand-new laboratory for radical retail experiments that could revolutionize the way people buy groceries.
More hubs means quicker and fresher delivery, which will bolster Amazon's existing grocery delivery service, AmazonFresh.
The bombshell news caused grocery store stocks to dip. However, there were a few big winners in the deal. But he says he was going to ask a Whole Foods cashier about the Amazon deal and then hesitated, unsure whether the workers were as excited.
Amazon would also look to change Whole Foods' inventory, introducing its own private-label products to replace items deemed too expensive to have mass appeal, the person with knowledge of the matter said.
Interestingly, Mackey called activist Jana Partners "greedy bastards" in an interview released on Wednesday. "This deal has dramatically flipped the table on traditional companies".
The Austin Chamber of Commerce sent Fox 7 a statement saying in part: "It's great to hear that Whole Foods, an iconic homegrown company, will remain an integral part of our local community". We spoke to food analyst David Portalatin of the NPD Group, a market research company.
"This store has become a money-making machine", said Tony Castro, a 40-year-old private chef, who shops daily in Whole Foods' sprawling downtown Los Angeles store. Considering the circumstances, a sale to a company like Amazon is the best possible outcome.
The immediate reaction from other grocery chains is a little easier to gauge.
A Whole Foods Market is pictured in the Manhattan borough of New York City, New York, U.S. June 16, 2017. Kroger, the Ohio-based grocery chain, also could make a run at Whole Foods, though its stock was torched today, dropping nine percent after the Amazon-Whole Foods deal was announced.
Fresh foods are the final frontier for Amazon.
Its AmazonFresh delivery service, which has been slow to take off, accounting for 0.8% of all grocery purchases past year.
For now, the Amazon-Whole Foods deal seems unlikely to change much. This is by far the largest acquisition Amazon has ever made. It's no wonder rival retailers are looking nervous.
Amazon was already in the news in India where it's subsidiary Amazon India was believed to be in talks to buy Big Basket, a news which was neither confirmed nor denied by both the parties. "I think this is kind of a natural extension of Amazon's business model".
Revenue from Whole Foods accounts for less than 10% of Instacart's revenues, according to a different source familiar with the partnership. Amazon, on the other hand, saw an increase in its share value of around 2.4 percent with around $11 billion adding to its market capitalization.
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