News Worms
News Worms

Shoppers may see big changes after Amazon buys Whole Foods

Marc Perrone, head of the United Food and Commercial Workers International Union, which represents millions of grocery workers, said that Amazon's "brutal vision for retail is one where automation replaces good jobs". As a matter of fact, all parties are expected to close the transaction during the second half of 2017.

And while some analysts expect Amazon to bring vast buying power to Whole Foods, Amazon's heft in the food market is far smaller than in other areas, and high demand for organic products gives farmers unusual bargaining power. It also had announced a board shake-up and cost-cutting plan amid pressure from activist investor Jana Partners.

Groceries are already a fiercely competitive business, with low-priced rivals like Aldi putting pressure on traditional supermarket chains and another discounter, Lidl, opening its first US stores just this week.

Similarly, Instacart was not privy to the news that Amazon was acquiring Whole Foods until the deal became public on Friday.

The deal will put fresh pressure on Walmart, which has been aggressively expanding its online business to win over consumers. Those stores solve much of Amazon's "last mile" delivery challenge for fresh groceries.

"There's no value in Amazon keeping the status quo at Whole Foods. Either way, it's good for consumers like myself", said Di Wu, a NY resident in her early 30s who is a member of Amazon's Prime fast-shipping club and who shops at Whole Foods at least twice a week.

That, in turn, could help Amazon do better with pricing and promotions, branding and the overall store experience, said Robert Hetu, a retail analyst at Gartner. Shoppers simply pick the items they want off the shelves and leave the store.

Amazon got through the upscale grocer's checkout line first.

Johnson, a consultant for the food industry, says other companies have to compete to stay alive.

But a person close to Instacart told Bloomberg that the startup thinks it can still hang on to its Whole Foods partnership. How? An Amazon spokesman denied any job cuts were planned.

Whole Foods, founded in 1978, has more than 460 stores in the United States, Canada and the United Kingdom, employs 87,000 people and is the leading natural and organic foods supermarket. "They're greedy bastards, and they're putting a bunch of propaganda out there, trying to destroy my reputation and the reputation of Whole Foods because it's in their self-interest to do so".

"Dominant players like Walmart, Kroger, Costco, and Target now have to look over their shoulders at the Amazon train coming down the tracks", O'Shea said.

The growth of online grocery shopping has faced barriers. "It'll be interesting to see what [technological innovations] they choose to pull forward into a larger-scale brick-and-mortar environment - which pieces are most resonant for shoppers and consumers".

He said that even if Amazon gets 20 million members of its Prime loyalty program to pay $15 a month extra for AmazonFresh grocery-delivery service, that's 20 million not going to traditional supermarkets.


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