Economy

Amazon deal slams retailers as Dow edges to record

Amazon deal slams retailers as Dow edges to record”

Bunch says from a marketing perspective, this is a big deal.

"The ramifications for all of retail are seismic - not just retailers that sell grocery, but for everyone", Chuck Grom of Gordon Haskett said.

While the news came as a surprise to most observers in both the technology and retail sectors today, it is apparently a move Amazon has been contemplating since at least last fall, when it first considered acquiring the organic food company.

Amazon's deal to buy Whole Foods comes as Wal-Mart is engaged in a price war with rivals such as Aldi and Kroger in the grocery segment, which makes up about 56 percent of Wal-Mart's revenue.

Amazon's shares rose 2.4 percent to $987.71, adding $11 billion to its market capitalization, which in one sense makes the acquisition almost free for Amazon shareholders.

NEW YORK (AP) — Online retail giant Amazon is making a bold expansion into physical stores with a $13.7 billion deal to buy Whole Foods, setting the stage for radical retail experiments that could revolutionize how people buy groceries and everything else.

Stocks of Whole Foods' competitors plunge following the company's acquisition by Amazon. The shift started within minutes of the announcement online retailer Amazon would taking over the grocery chain Whole Foods. Gartner retail analyst Robert Hetu said Amazon could bring pieces of that to Whole Foods to further cut costs.

That was feeling of Taylor Malooly, 19, a University of Texas student at Whole Foods in Austin, who said a Whole Foods delivery service would have to be fast if he were to try it.

Amazon has been eyeing stores that could allow traditional in-store purchases, online ordering with on-site pickup and home delivery, using the stores' warehouses as distribution points.

Inside the stores, Whole Foods customers could see big changes, including easier checkouts. Stone sees the possibility that Whole Foods CEO John Mackey could do what he's wanted to do, expand the chain to about 1,000 stores from its current stable of more than 460.

Mackey will remain CEO after the merger and Whole Foods will continue to operate under its own name.

Excluding debt, the deal is valued at US$13.39 billion, based on 318.9 million diluted shares outstanding as of April 9. Customers are assigned a personal shopper who scours the aisles, purchases and delivers items from retailers like Whole Foods.

Completion of the transaction is subject to approval by Whole Foods Market's shareholders, regulatory approvals and other customary closing conditions.

Now, Amazon is looking to become a hybrid retailer and challenge Walmart for supremacy as the nation's largest retailer. It has expanded from a book seller into a merchant of almost all consumer products, as well as producing videos. We hope that won't be the case with this proposed acquisition of Whole Foods.



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