Amazon buys Whole Foods, invests $14 billion into groceries

Amazon to buy Whole Foods Market in deal valued at $13.7 billion

Whole Foods wove its way into the crowded and competitive Dayton grocers market in 2015, with its first Dayton-area store, in Washington Twp.at 1050 Miamisburg-Centerville Road.

Any number of Whole Foods locations - more than 460 in the U.S., Canada and Britain - could be used as jumping off points for wider delivery and pickup of groceries and prepared foods ordered online.

The deal has the possibility to be "transformative", Moody's lead retail analyst Charlie O'Shea said in a note, "not just for food retail, but for retail in general". While Amazon has been building more and more delivery hubs, the Whole Foods deal gives it 456 stores that it can instantly fit into that network, said Josh Olson, analyst with Edward Jones.

The acquisition stands as a huge boost for Amazon's strategy to integrate the brick-and-mortar model into its business. The same goes for Shipt, an Alabama-based grocery delivery service that's also a Whole Foods partner.

-Amazon. Investors like the deal and think it will be good for the online retail giant, which has been expanding its grocery offerings. It also had been facing increased pressure from rivals, including European grocery chain Lidl, which is planning to enter the East Coast market, along with Aldi and Trader Joe's. Whole Foods is courting the discount shopper with its lower cost brand 365.

The merger of Whole Foods and Amazon is expected to close later in 2017 after gaining approval from US regulators and Whole Foods' stockholders. Target tumbled by 10 percent and Walmart was down by 6 percent.


Fresh foods are the final frontier for Amazon.

Take Amazon Go, for example, the company's high-end shopping service that allows shoppers to walk in, get whatever stuff they need, and then go - no checkout lines, no cashiers.

And this headline from Business Insider helps explain it: Amazon is acquiring Whole Foods - and Walmart, Target, and Kroger should be terrified. While both companies aren't headquartered here - check out Austin Inno for the deal's impact on Whole Foods' home base - the deal is certainly going to have an impact here and everywhere else across the country, if only due to their collective reach.

Amazon is already playing with innovative ways to make grocery store runs more convenient. Ranked 28th in the world, Whole Foods Market has carved a niche for itself in terms of supplying natural and organic foods to shoppers, and will now become a part of a major force in online retail business. State Street and Fidelity both have a substantial amount of shares in Whole Foods, as BBJ reported. According to multiple reports, Whole Foods also invested in Instacart.

"I'm excited to see maybe if they do some kind of thing with Prime now and Whole Foods, that would be interesting to me", Hiddeman said. But if customers know that what they are getting is the same as what they'd get at the local store, they are more likely to try it out.

"Instead of deliver to my home, why not just come down here?"

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