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Amazon Gets Their Brick and Mortar Grocery Store After Buying Whole Foods

The $13.4 billion deal could revolutionize your grocery shopping experience.
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amazon buys whole foods

Amazon made a huge splash this morning, announcing plans to acquire Whole Foods for a whopping $13.4 billion. It's a bold move for the e-commerce powerhouse, signaling its growing dominance in the grocery industry.

“This is an earthquake rattling through the grocery sector as well as the retail world. We can only imagine the technological innovation that Amazon will bring to the purchasing experience for the consumer," Bankrate.com senior economic analyst Mark Hamrick told Slickdeals via email.

Amazon is known for infusing the grocery shopping experience with forward-thinking tech. Its Seattle-based Amazon Go storefront (currently open to Amazon employees in Beta form) lets customers shop without having to checkout. Amazon's "Just Walk Out Technology" leans on a mobile app to create a virtual cart that charges your Amazon account once you leave the store.

Today's news has everyone wondering if we can soon expect the same experience in Whole Foods stores. An Amazon rep told The New York Times that the company has no plans at this point to use this kind of technology at Whole Foods. But will that change? It's a legit question that would revolutionize the Whole Foods shopping experience, especially since Whole Foods will continue operating its stores after the deal closes. Either way, Hamrick sees the partnership as a win for consumers.

“This will be a good deal for consumers, including those who might not have been doing business with Whole Foods in the past, either because of its positioning in the organic branding space or because prices have been seen as high," he said in an email. "Amazon can be expected to work to deliver better value to grocery customers, both online and within the brick-and-mortar space.”

In other words, Amazon might be on the way to offering cheaper organic groceries.

So what does this mean for AmazonFresh? The grocery delivery service—which charges $15 a month, in addition to the annual $99 Prime fee—allows for seamless online ordering in Seattle, Northern and Southern California, New York and Philadelphia. Will Whole Foods products join its offerings? We're assuming the answer will be yes, but time will tell.

Also See: Amazon Fresh Review: Is It a Good Deal?

What do you make of the big news? Share your thoughts in the comments below!



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Marianne Hayes is a freelance writer, wife and mother in Tampa Bay. After earning a degree in journalism and creative writing from the University of Central Florida, she spent nearly a decade getting lost in New York City and Los Angeles before making her way back home again in 2014. Marianne's writing has appeared in a variety of publications including The Huffington Post, Forbes.com, LearnVest, The Daily Beast and more. When she's not writing, Marianne is usually cruising her local bookstore with her two daughters.

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10 Comments

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Joined Jul 2008
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#2
This couldn't happen soon enough. This is terrific for the consumer, and will put a ton of pressure on the rest of the large grocery store chains such as Kroger who are still attempting to price gouge customers with poor store design, unclear sales, changing produce placement every week, low stock forcing you to purchase a different variation of what you originally wanted, and bad customer service.
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Joined May 2017
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#3
This will be very good for the grocery market because having amazon on board will hopefully deduct cost and make the items at whole foods more affordable. Also, the idea of having whole foods delivered to you sounds AMAZING.
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#4
Technically, its an offer. Whole Foods board can still reject the offer if say, Sears decides to offer a higher price.....

Regarding Amazon making Whole Foods foods more affordable...I doubt it...WF's operating margins is in the mid single digits (4-6%), better than traditional supermarkets like Kroger (low single digits e.g. 2-3%). Granted, once folded into Amazon, WF would not have to care about maintaining their historic margins...its all rolled into the corporate margins anyway...
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#5
Why Buy it, when Amazon has money to start from new? The Deal is TOO good for Whole Foods. WF has the upper hand.
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#6
I think it's great for the consumer as it will likely drive prices down not only at Whole Foods, but at competing markets as well. Margins may be thin for WF now, but the ability to increase profit margins and lower prices will be a reality with Amazon's buying power. I'm thrilled regardless since we own stock in Amazon and in the long run this is just going to be another factor to drive up the stocks. It's even better if it pushes the stock split that's been rumored within the walls of the distribution centers.
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Big Boy Breeches
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#7
Seems like a great deal for both and ineveitable now that Amazon has lost its tax advantage. WF gets an out from their struggling and declining model; Amazon gets a b&m store with grocery service to boot. People will flock to it; and for some reason if it doesn't work out, WF stores are always in prime locations to sell off property and still make bank...damn Amazon taking over.
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Last edited by HurricaneAlley June 19, 2017 at 12:25 PM.
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Joined Oct 2005
Big Boy Breeches
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#8
Because that isnt the SD way, why start from scratch when you can have something thats already up and running employees and all that alone curtails cost of buildings alone.
Quote from Gentle_Touch
:
Why Buy it, when Amazon has money to start from new? The Deal is TOO good for Whole Foods. WF has the upper hand
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#9
Just wondering if purchases from WF will qualify for similar % rebate when using the Amazon Chase credit card. If true, that would mean 5% back on all WF purchases?
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#10
Quote from lafskso4
:
Just wondering if purchases from WF will qualify for similar % rebate when using the Amazon Chase credit card. If true, that would mean 5% back on all WF purchases?
It should

Better yet agc just increased in value for meBig Grin. Let the BB/Target agc continue but me thinks it's going to cease real soon and 3rd party stores will stop carrying ago altogether, just as we don't see any Wally World cards at bestbuy
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#11
If the deal goes through there probably will be Amazon Lockers installed, just like in my local Rite-Aid. Amazon won't have to rent the space for them and it would probably bring in more traffic.
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