Amazon buying Whole Foods in bold move into brick and mortar

The Whole Foods store at the foot of the Oakland Hills is an always busy success story even as some customers expressed a range of views when asked about Friday's bombshell announcement that online giant Amazon is snapping up the specialty grocer.

In 2016 alone, Whole Foods had sales of $16 billion across its more than 460 stores in the United States, Canada and the United Kingdom.

Stock rates of supermarkets, food producers, processing companies, retailers, and shopping malls lost over U.S.$35 billion nearly immediately after the news was released, indicating the potential effect this could have on the various industries.

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

"We want to assure you that Amazon shares Whole Foods Market's deep commitment to quality and customer service". Stocks of supermarket chains fell in the news of the Amazon-Whole Foods deal, and Tarrant says the pressure on the competitors will get more intense with time.

"As far as Instacart's partnership with Whole Foods is concerned, their business is far diversified away from any single grocery chain", Simonian told CNNTech. "This gets Amazon straight up the curve with a credible, albeit upmarket, range", Bernstein said in the research note.

Wal-Mart is offering curbside pickup of online grocery purchases at 700 locations, with 300 more planned by year end. The Whole Foods purchase would let it expand to many more.

By joining forces with Amazon, Whole Foods gains access to an entirely new distribution channel - which should be good news for anyone hoping to shop for organic kale online.

At least one local shopper at the Andover Whole Foods store had a much different perspective on the deal.

Whole Foods would also pay a $US400 million termination fee to Amazon if the grocer receives a better offer or the board of directors pulls the company out of the deal.

When Amazon was founded more than two decades ago, the internet was still in its infancy - but Jeff Bezos, the company's founder, had little doubt it was where the future of retail would be built. The same goes for Shipt, an Alabama-based grocery delivery service that's also a Whole Foods partner.

Since Whole Foods is a publicly traded company it could be scuttled if another bidder decides to offer a lot more money for the grocery chain.

The $42-per-share, all-cash deal, expected to close later this year, includes Whole Foods' net debt and represents about a 27 percent premium to its closing stock price on Thursday.

Whole Foods now has 430 stories, but after the acquisition, they will have 350 million stores because they will be on every desktop, Feinberg says.

Courtney Hiddeman and her family live right down the street from the Whole Foods "world headquarters" on Bowie Street in Austin.

Latest News