Amazon Buying Whole Foods Could Mean Pain for Costco

Posted June 26, 2017

That's the vision Amazon has for Whole Foods now that the e-commerce giant wants to acquire the organic grocer for some $13.7 billion in an all-cash transaction!

Analysts say there's no reason to think Amazon's deal with Whole Foods will be limited to groceries.

Whole Foods already has a separate store, called 365, which offers private-label goods and lower prices than its typical formats. (ROST), Wal-Mart Stores Inc. "I said, 'I know". He expects Amazon to put pressure on grocery stores to lower prices.

Johnathan Bustamante, manager at Best Market located in Tribeca, is unsure how the Amazon-Whole Foods deal will affect the grocery chain, but said that Best Market will continue to run their operations as normal.

Kantor noted that Amazon's market cap gain roughly equaled the amount the company is paying for Whole Foods. "And I think it would be insane to change them", said Jeff Wilke, chief executive of world-wide consumer at Amazon, at the Whole Foods town hall.

Mackey stressed that he will stay on as CEO, that Whole Foods' headquarters to remain in Austin rather than shift to Amazon's hometown, Seattle, and that numerous company's core values will stay the same.

Turner pointed out in the note that Amazon (NASDAQ: AMZN) has already tried restaurant delivery - with "minimal success" - and that Grubhub and Whole Foods likely share a similar user base in terms of geography and demographics.

Whole Foods also might draw a rival offer from one or more large private-equity firms because "there's a tidal wave of money that's sloshing around" in that industry, said Eric Schiffer, chief executive of the Patriarch Organization, a private-equity firm that isn't involved with Whole Foods. Both Amazon and Whole Foods are concentrated in the country's major population centers, including California, Texas, New York, Florida, Pennsylvania and New York.

Meanwhile, Amazon's proposed takeover of Whole Foods has spurred talk of other mergers and acquisition in the grocery sector.

Can Amazon, the company that persuaded people to buy ever more items online, win enough of them over to having their fresh groceries arrive in an Amazon box?

"We do think our partnership with Amazon is gonna help us do that more skillfully and, hopefully, faster".

With its purchase of Whole Foods Market, Amazon is hoping to compete with Walmart, the world's biggest retailer.

Whole Foods CEO John Mackey, who once lived in a vegetarian commune, is wary of Wall Street. The firm represents individual investors in shareholder derivative lawsuits, and members of the firm have helped shareholders recover more than $1 billion of value for themselves and the companies in which they have invested.