Amazon Buys Whole Foods For $13.7 Billion In Brilliant Bezos Game-Changing Retail Power Play
Whole Foods will also retain its Austin, Texas-based headquarters once the merger is complete. “This partnership presents an opportunity to maximize value for Whole Foods Market’s shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers,” said John Mackey, Whole Foods Market co-founder and CEO.
“Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,” added Jeff Bezos, Amazon founder and CEO. “Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades – they’re doing an amazing job and we want that to continue.”
This latest power play by Bezos shows that Amazon is more than willing to expand beyond its dominant positioning in the online retail space. The company has expanded its physical bookstore locations (which is quite ironic given Amazon’s humble beginnings), and in recent months has started experimenting with experimental stories that bypass both human cashiers and checkout lines.
But perhaps the biggest benefactor of this merger with Whole Foods will be the AmazonFresh grocery delivery service. AmazonFresh is only available in a handful of metropolitan areas in the United States, but Whole Foods has over 400 locations spread out across the nation which could make expanding the service more efficient. It would also mean headaches for more establishes grocery chains, including Amazon rival Walmart.
Target down 9%
— Carl Quintanilla (@carlquintanilla) June 16, 2017
WalMart down 5%
Costco down 6%
Sprouts down 11%
Kroger down 13%
Mkt acting like no one else will stand a chance.$AMZN $WFM
Wall Street Journal Financial Editor Dennis K. Berman perhaps stated it best, tweeting:
Amazon did not just buy Whole Foods grocery stores. It bought 431 upper-income, prime-location distribution nodes for everything it does.
— Dennis K. Berman (@dkberman) June 16, 2017
Amazon seems to be expanding its reach by tapping into sectors that directly benefit its core business. The company is currently experimenting with drone delivery in the UK and has amassed a fleet of long-haul tractor trailers to speed up deliveries between distribution centers. Amazon is even looking to build an air cargo hub in Hebron, Kentucky to reduce its reliance on freight heavily lifters like FedEx and UPS. The hub will be serviced by a fleet of more than three dozen Boeing 767-300 aircraft.
(Images Courtesy: Steve Jurvetson/flickr, Open Grid Scheduler/flickr)
