This could be good news even if you don't shop at Whole Foods. He raised his price target on Whole Foods to $45 after the Amazon deal was announced. On the other hand, Mark Hamrick of Bankrate isn't pleased on the tech giant's acquisition; he noted that "Amazon is smart about mining data". That's business that comes right out of traditional grocery retailers.
Americans have been slowly moving toward online grocery shopping.
Most of these firms would have the same goal in mind: keeping Amazon.com, Inc. out of the market.
Whole Foods also might draw a rival offer from one or more large private-equity firms because "there's a tidal wave of money that's sloshing around" in that industry, said Eric Schiffer, chief executive of the Patriarch Organization, a private-equity firm that isn't involved with Whole Foods. Amazon clearly wants to do to supermarkets what it did to bookstores.
The message is this: The brick-and-mortar retail business that pioneered organic, fresh food and the country's dominant e-commerce company makea powerful combination. How that experiment has panned out so far we don't know for sure.
Parikh added that Amazon's offer appears to be "undervaluing the company's prospects and the powerful brand" and that Whole Foods could do better. "Whole Foods Market has been satisfying, delighting and nourishing customers for almost four decades - they're doing an awesome job and we want that to continue". Amazon is trying to lure furniture retailers with greater controls around pricing on its marketplace and elimination of a nationwide delivery mandate under the new program expected to be ready in the third quarter.
Photo by David Ryder / Stringer / Getty Images.
"Highly likely", said Lloyd Greif, whose investment firm Greif & Co. specializes in mergers and acquisitions but isn't involved with Whole Foods.
"We do think our partnership with Amazon is gonna help us do that more skillfully and, hopefully, faster".
Citi's analyst Brian Raymond said that "Whole Foods provides Amazon with a (primarily leased) 460 retail store footprint across 42 U.S. states, serving as distribution points and pick-up locations". And we're only talking about groceries, that brings us to the next point.
It's not yet clear what specific changes are in store at either Amazon or Whole Foods, since the two companies are saying little about their plans.
The acquisition gives Amazon the in-store presence it previously lacked. In fact, cashiers (and checkout lanes) may go the way of the dodo entirely if Amazon uses the same disruptive retail technology being tested at a Seattle convenience store.
Major acquisitions like the Whole Foods buyout are very complex. This was reflected in the stock market, with some companies in the food industry seeing their shares fall immediately.
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