Amazon Buys Whole Foods for 13.7 billion USD

19.06.2017

Amazon continues expanding in the direction of offline retail. After recently opening up the first Amazon supermarket and its first book store, the ecommerce giant has now acquired the grocery chain Whole Foods with its 460 shops in the US, Canada and the UK.

Amazon was the company that made traditional brick-and-mortar stores seem unnecessary to a large extent. After disrupting the market, the company is now attempting to build it anew. And what an attempt it is – at 13.7 billion dollars, Amazon has just made a move that can change everything for supermarkets. What was already a hugely competitive and tough market now has a player with huge amounts of cash to throw around.

The market reflected how much the online retailer is expected to pressure its competitors. Stores like Kroger, Walmart and Target all saw their stocks go down after the deal between Amazon and Whole Foods was announced. But it didn’t stop there – food companies like Hershey and Campbell Soup also suffered, as the market obviously expect Amazon to be offering products at very competitive prices. Overall, over 22 billion USD of market value was lost in grocery-related stock after the announcement, CNN reports. At the same time, Whole Foods saw their stock jump by 29 percent on Friday.

“Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,” Amazon CEO Jeff Bezos said. Amazon’s pick of Whole Foods isn’t random. The target market of Whole Foods – millennial shoppers and well-off customers looking for quality probably has a lot of people who are excited by tech bringing some innovation to traditional shopping.
 

Source: http://money.cnn.com/2017/06/16/investing/amazon-buying-whole-foods/index.html  
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