Will Walmart Bid for Whole Foods?

Posted June 24, 2017

Wal-Mart, which got a stake in JD.com in the Yihaodian deal, upped its share in the Chinese firm to 12.1 percent in February, having bought online retailer Jet.com in a $3 billion deal previous year.

Last week it struck a deal to buy Whole Foods Market Inc for $13.7 billion, its biggest deal to date. "The Whole Foods purchase is a $14 billion bet on the future of food that comes in boxes", argues Derek Thompson, a senior editor at The Atlantic.

In his statement, Appelbaum said that Amazon's purchase will have a negative effect on labor.

"Retailers who don't accelerate how they innovate will be forced to liquidate", she said.

Food delivery has failed before, so why does Amazon think it might work now? After Wall Street learned of the buyout June 16, Amazon's share price rose from an already-fat $964 to an even fatter $988. "This should be a concern, not only for food retailers, but also for food brands".

"I don't know if they do deliveries", she said, referring to Whole Foods.

Todd Maute, a partner at CBX, said Amazon always can be counted on to disrupt. Her products are sold in 22 Whole Foods stores in the Chicago area.

Whole Foods is now owned by a company that didn't exist 25 years ago. In what is no doubt a reaction to Amazon's push into this retail category, the largest retailer in the world has increased its online-food-ordering capabilities.

He also expects that Amazon will demand lower prices from food manufacturers than Whole Foods has.

It is not clear if Amazon will be able to sell the ads at the intended price, or will be able to make a profit from them.

"By God, we're gonna become as customer-centric as Amazon", Mackey said. The company's warehouses, built for its own goods, are now used by independent sellers. For example, as an alternative to home delivery, Amazon could allow customers to pick up their package at the nearest Whole Foods and earn bonus points or some other reward for helping the retailer reduce its shipping costs. Some require certification from the U.S. Food and Drug Administration, and extra care must be taken to keep shelves clean and prevent pests from contaminating food. In fact, it's the key to sustainability in this volatile retail marketplace.

Lidl and Aldi's growth plans have put volume and pricing pressure on conventional food providers. As with so much about Amazon, the Whole Foods deal is important not for what it represents now but how it might transform Amazon and up-end rivals-most notably, Walmart-in future. (NASDAQ:AMZN) jolted the entire sector mid-month when it announced that it would buyout Whole Foods Market, Inc.

The bottom line? Amazon acquiring Whole Foods won't give the e-commerce giant "any discernible edge" over Walmart, according to Charlie O'Shea, lead analyst for Moody's.

A representative for Whole Foods confirmed that Amazon CEO Jeff Bezos was at the meeting.

But an Amazon-Whole Foods marriage will likely produce other concepts, said David Kitchens, a principal at architecture firm Cooper Carry. Yet it was the Whole Foods deal, more than ten times bigger than any acquisition Amazon has made so far, that caused the bigger stir.

Amazon.com Inc is looking to charge advertisers $2.8 million (roughly Rs. 18 crores) for packages that include 30-second spots during the Thursday night National Football League games it will stream live to its Prime customers this coming season, two people familiar with the matter told Reuters. In a sign of how powerful its private label can be, analytics company 1010data found that for a 12-month period ending past year, 94% of all batteries sold online went through Amazon sites, and Amazon's own brand made up about a third of all online battery sales.

Of course, a union with Amazon could hurt Whole Foods' image on food quality. Mackey expressed a similar expectation. "We just had these big grins on our faces, like, 'These guys are unbelievable'". "They're not stupid enough to go change that". The deal is expected to close later this year.

Should we be concerned that Amazon will have a monopoly on the economy along with Google and Apple?