Podcast: Amazon Buys Whole Foods

Share
Podcast: Amazon Buys Whole Foods

Amazon will acquire upscale USA grocer Whole Foods Market, known for its pricey organic options, for $13.7bn, the companies announced yesterday, in a deal that underscores the online retailer's growing influence.

Headquartered in Austin, Texas, Whole Foods was founded in 1978 and now has more than 460 stores with about 87,000 employees in the United States, Canada and Britain. Amazon now has six fulfillment centres across Canada, two in Vancouver and four in and around Toronto.

"In 2001, Apple chose to get into music, an industry that it wasn't in, and now they dominate sales in that industry brilliantly", he said. Spokesperson Mike Berman said Amazon's deep pockets might create more opportunities to invest throughout the region. Amazon is making a statement today.

Will this change how I buy my groceries?

Shares of Amazon have risen 34.4% in the past year, while Whole Foods shares were up 7.3% for the year (about 10% below the performance of the S&P 500) before skyrocketing when the deal was announced on Friday. Amazon officials have stated in the past they want to expand into groceries. Blue Apron's S-1 filing noted that online sales composed just $9.7 billion, or 1.2%, of the $781.5 billion US grocery market in 2016, according to a Euromonitor report. The Russell 2000 index fell 9 points, or 0.7 percent, to 1,400.

Energy shares rose 1.7 per cent, propping up the SP 500.

"You might still have people who like to physically go to a Whole Foods and pick out their produce, but if Amazon can figure out a way to deliver fresh organic produce at a price that is better than Kroger's it will hard for others to compete". "And it is 16 times more expensive to run a fleet of trucks, between labour, energy and time, than it is to use drones". The upscale grocery chain will operate as always.

—Amazon. Investors like the deal and think it will be good for the online retail giant, which has been expanding its grocery offerings. Rival Metro has introduced a similar program in and around Montreal.

"Everybody orders from Amazon right?" said David Tawil, president of Maglan Capital in NY.

Walmart: The discount retailer offers a limited online grocery shopping service with an in-store pickup option in Calgary, Edmonton, Ottawa and the Greater Toronto Area. Because we also can't help spending what seems like billions at the Whole Foods, but without all the perks Amazon got for it. "This puts a tremendous amount of pressure on grocery retailers to figure out their online and delivery strategies".

Shares of Kellogg and General Mills, for example, were falling 2 percent and 3 percent, respectively, Friday.

"Dominant players like Wal-Mart, Kroger, Costco, and Target now have to look over their shoulders at the Amazon train coming down the tracks", said Charlie O'Shea, lead retail analyst at Moody's Investors Service.

Share

Advertisement

Related Posts

Gunman shoots congressman, police at Virginia baseball practice
Scalise was in critical condition after surgery, according to So Young Pak, spokeswoman for MedStar Washington Hospital Center. Lipinski said the police officers and shooter exchanged gunfire across the baseball field as congressmen scattered.

Game on: Tragedy won't stop annual baseball game
And the game will go on. "When the Sergeant at Arms arrived, rain had already canceled the game", the website says. That's Doyle in the gold number #21 Clemente shirt in a picture later referenced by House Speaker Paul Ryan .

Comeback king Yuvraj set for ODI milestone in semis
Mashrafe, looking back on the historic big matches, the Bangladesh Twenty20 match against India , you could not manage to win it. So even if we look at the last match, when Ross [Taylor] and [Kane] Williamson batted really well, we came back strongly.

Chelsea 1st to visit Tottenham at Wembley in Premier League
August concludes with a clash between Liverpool and Arsenal prior to the worldwide break for the 2018 World Cup qualifiers. It'll be the first time West Ham have played at home on the final day since they played Reading in 2013.

London Tower Block Fire Rises to 17, More Feared Dead
Ms Trevisan reportedly called her mother at 3am, saying a fire had broken out in the building and they were waiting for help. In addition, 74 people were injured in the blaze, with 37 hospitalized and 17 of them still in critical condition.

Sony Has A Weak Excuse For Not Allowing Cross-Platform Play
Sony PlayStation 4 has dominated the latest generation of consoles, outselling Xbox One by 2-to-1, according to industry trackers. The One S can be found for as little as £200 in the United Kingdom , while the One X will cost more than twice as much at £450.

Congressional baseball practice shooting: What we know about the victims
The shooting occurred one day before the annual Congressional Baseball Game , which is scheduled for June 15 at Nationals Park. Representative Brad Wenstrup held the same opinion about the significance of Scalise's presence at the event on Wednesday.

Many Cuban exiles embrace Trump policy but want more
During his visit to Riyadh last month, he said he had not come to "lecture" about any country's internal policies. On the pretense of promoting liberty in Cuba, the administration is restricting Americans' right to travel.

Rickie Fowler leads US Open after day of highs and lows
The previous record for most sub-par rounds in the first round of the tournament was 39, set in 1990 at Medinah Country Club. Mickelson, who celebrates his 47th birthday on Friday, believes he will have more chances at that elusive U.S.

Warriors Guard Steph Curry Won't Go to White House if Invited
And it was just a matter of time before we were going to break through. "Thank you for the support". It would be great to see Cleveland with Paul George taking on Golden State in next year's finals.

© 2015 ExpressNewsline. All Rights reserved.