Amazon-Whole Foods Marriage Could Disrupt Grocery Business (NASDAQ:AMZN)

A Wall Street sign near the New York

June 16 (Reuters) - U.S. stocks fell on Friday as Wal-Mart and other retailers were slammed by Amazon.com's biggest foray into the brick-and-mortar retail sector with its $13.7 billion deal to buy upscale grocer Whole Foods.

Amazon is expected to thoroughly transform Whole Foods Stores, expanding them beyond being grocery stores to integrate them into their broader operations, perhaps including technology retail, and online-purchase ability.

In Whole Foods, Amazon is acquiring a company that has recently come under pressure from investors for its lagging performance.

On top of the Whole Foods Market deal, Amazon has unveiled plans for a constellation of book shops around the United States - stepping in to replace the very bricks-and-mortar booksellers it drove out of business with its online offerings. Shares of Whole Foods shot up 29 percent and closed at $42.68 amid the news. Whole Foods shares were trading just under that level in early trading on Friday, as investors saw negligible regulatory risk to the deal closing.

Excluding debt, the deal is valued at US$13.39 billion, based on 318.9 million diluted shares outstanding as of April 9.

Whole Foods Market will continue to operate stores under the Whole Foods Market brand and source from trusted vendors and partners around the world.

Apparently longtime CEO John Mackey will stay the CEO and the headquarters will stay in Austin.

Whole Foods will run as a wholly independent subsidiary of Amazon.

More news: Mueller investigating Jared Kushner's business dealings

With this strategy, Amazon is planning to make the prices competitive and attract "more low- and middle-income shoppers" to its retail stores, which may still be located in posh localities.

Whole Foods did not embrace Jana's suggestions.

Following the announcement of Amazon's plan to purchase Whole Foods Market, Inc.

A Whole Foods Market purchase awaits placement in a auto trunk, outside the Jackson, Miss., store Friday, June 16, 2017. Amazon is also experimenting with a "click and collect" model that lets customers buy groceries online and pick them up at new AmazonFresh locations.

For the first time ever online retail giant Amazon is entering the fresh food space and offering a brick-and-mortar experience.

Walmart has been trying to address some of those online threats, pushing harder into online to build on its strength in its stores and groceries. Certainly, it would appear to Cantillon that Bezos sees the future as slightly more nuanced than the vista of couch-bound online shoppers ordering everything from fast food to films online.

Importing Whole Foods' catalog turned out to be a complex endeavor because its inventory varies by region. Who knows how long after that Americans will start seeing Kindles for sale in the Whole Foods checkout and Amazon Echos on display in a new Whole Foods electronics section. However, Whole Foods does not have access to Instacart's financial numbers and analytics.

Walmart, which has the largest share of the US food market, has already been pushing harder into e-commerce to build on strength in its stores and groceries.

Related News:

  • Donald Trump reports over $594 million as revenue

    The latest report shows Trump resigned from more than 500 positions, stepping down from many on the day before his inauguration. Over $37 million of his income came from Mar-a-Lago, and another $20 million rolled in from the Trump National Golf Club.

    Wallenda Daredevil Dangles over Niagara Falls by Mouth, Breaking Record

    Erendira Wallenda is scheduled to discuss her plans with reporters Wednesday morning on the American side of the Falls. Now imagine dangling over one of the world's largest waterfalls, hanging onto a hoop with your teeth.

    Theresa May sidesteps questions about response to Grenfell Tower disaster

    THERESA May faced cries of "coward" and "shame on you" as she returned to Kensington to meet Grenfell Tower disaster victims. Ade Deane-Pratt from Camberwell, south London said she was marching because of the anger she felt towards the Government .
  • Putin Comments on New US Senate's Sanctions Against Russia

    Putin Comments on New US Senate's Sanctions Against Russia

    The motion, which came in the form of an amendment to the Countering Iran's Destabilizing Activities Act, is sponsored by Sen. Sanders says he's anxious the legislation, which also includes sanctions against Iran, could hurt the Iranian nuclear deal.
    May to talk with NI parties amid concerns over DUP deal

    May to talk with NI parties amid concerns over DUP deal

    Labour's unexpectedly strong second-place showing has thrown national politics into disarray. So far issues between the two parties have stopped an agreement.
    Newt Gingrich: Trump Cannot Obstruct Justice

    Newt Gingrich: Trump Cannot Obstruct Justice

    Trump called the investigation a "witch hunt" and his allies attacked Mueller in the media. Both were in relation to investigations into Clinton's misconduct with Monica Lewinsky.
  • New anti-Iran sanctions, U.S.  intrinsic animosity toward Iran

    New anti-Iran sanctions, U.S. intrinsic animosity toward Iran

    To become law, the Senate bill would have to pass the House of Representatives and be signed by President Donald Trump. The senate legislation also includes fresh sanctions on Russian Federation .

    PGA: Casey in US Open mix

    But the world's top three missed the cut - the first time that has happened at a major since the rankings began in 1986. Such low scoring might suggest the 11-year-old course was a cream puff, hardly the ultimate test in golf .

    Philip Hammond: UK must be pragmatic in Brexit talks

    Mr Hammond mentioned that stance as he arrived in Brussels for a meeting of European Union finance ministers. She also said: "I am equally clear that no deal for Britain is better than a bad deal for Britain".
  • Mother who abandoned 4-year-old at airport located in Athens

    Mother who abandoned 4-year-old at airport located in Athens

    Police said she still may be driving the white Nissan Versa with Florida tag HKNA25 which she rented at the airport. Miranda Hakimi Harvey , 29, of Odenton, Maryland , was found at the Graduate Hotel in Athens, Georgia .
    Cuba rejects new USA  policy, calls it 'archaic'

    Cuba rejects new USA policy, calls it 'archaic'

    Trump, however, stopped short of breaking diplomatic relations restored in 2015 after more than five decades of hostilities. By delivering a speech in Miami , Trump made his policy known in the center of the Cuban-American community.
    Poll shows 65% of Americans disapprove President Trump's job performance

    Poll shows 65% of Americans disapprove President Trump's job performance

    But 15 percent of Republicans hold a positive view of Russian Federation , 45 percent a negative view, and 40 percent are neutral. The poll surveyed 1,068 Americans from June 8 to 11, and respondents were interviewed either by phone or online.


Most liked

Trump administration revokes program to protect immigrant parents
The decision however does not affect another Obama-era memorandum known as Deferred Action for Childhood Arrivals program (DACA). Arrests of immigrants in the interior of the country have increased under the Trump administration.

US Senate approves new sanctions on Russia, Iran
House Republicans are expected to review the Senate-passed sanctions bill in the coming weeks, an aide told Politico. The White House has not yet released a statement on the president's reaction to the sanctions bill.

Justin Thomas shoots record-equalling 63 at US Open
His ball ended up just over six-feet away , and Thomas looked likely to gain the outright lead with an eagle. Open history, making him the first player since Vijay Singh accomplished the feat at Olympia Fields in 2003.

Putin Thanks FIFA for Helping Russia in Arranging Confederations Cup
Russian Federation deserved its first-half lead after twice having shots stopped on the line in the opening 10 minutes. New Zealand's Michael Boxall got a touch on the ball and was credited with an own goal.

Lead detected in baby food samples
Researchers analyzed eleven years of federal data, tested 2,164 baby food samples and found lead in roughly 20 percent of them. Children face the highest risks from blood lead levels, including behavioral problems and lower IQs as they grow.

Swift returns to Spotify
Fans of the pop stars started going insane when they realized that Perry's album was also going live at exactly the same moment. With that, Swift had the removal of all her albums from the rest of the streaming services .

White House now a crime scene
According to journalist Timothy O'Brien , Trump repeatedly told him in the 2000s that he was recording their conversations. White House Press Secretary Sean Spicer didn't have any updates on Monday about when that answer may be coming.

US Open sees top seeds cut, four-way tie for lead
Open courses, it was beginning to firm up from the early week rain, plus the USGA had a few tricks up its sleeve. His schedule will pick up immediately. "And unfortunately with where I was hitting it, I wasn't in the way".

Steve Scalise Still in Critical Condition But Improving, Doctors Say
Scalise, 51, was in dire condition when he was first shot, but internal bleeding is under control and the prognosis is positive. Griner remains hospitalized at MedStar Hospital after getting shot in the ankle, and Sava described her in good condition.

Madrid Wins Back-To-Back Titles, £1.5m Bonus for Each Player
On Saturday Madrid recorded their 12th European Cup win, five more than their nearest rival A.C. Real Madrid were playing brilliantly, and dominated the ball again around the 64-minute mark.

10 still in critical condition after London fire
Aluminum composite panels essentially consist of two thin layers of aluminum sandwiched around a lightweight insulating material. The tragedy cast a pall on the Trooping the Color festivities that mark the official birthday of Queen Elizabeth II .

'Steve Scalise Took A Bullet For All Of Us'
Scalise is a proud LSU alumnus and great supporter of the university, and we are proud to help out even in this small way". Trump and his wife Melania visited Scalise in the hospital Wednesday evening, bringing the injured congressman flowers.

Cosby accuser thanks prosecutors after mistrial
O'Neill has granted a mistrial in the case of Bill Cosby after more than 52 hours of deliberation left the jury deadlocked . Cosby's admissions in that deposition led Montgomery County prosecutors to file charges against him.

US Open filled with limitless possibilities, few stars
Schauffele had a chance to tie Fowler for the lead until his 12-foot birdie putt on the par-three ninth slid by on the right. What raises immediate questions about Erin Hills is the number of players under par, even with so many top stars struggling.

Bill Cosby trial: Judge declares mistrial after jury fails to reach verdict
Steele declined comment on a statement from Cosby's wife, Camille , which called him "heinously and exploitively ambitious". Constand previously sued Cosby in civil court in 2005, a case that ended with her receiving an undisclosed cash settlement.