Amazon rocked businesses around the world on Friday when the company announced plans to buy Whole Foods Markets and enter the grocery retail business. The $13.7 billion deal will take the battle between Walmart and Amazon to a new level.
The deal between Amazon and Whole Foods Markets will shake up the grocery industry as Amazon has been investing and testing new technology to transform the retail industry, such as Amazon Go, now the company has physical locations to test and implement those new technological innovations.
News of the deal sent shares of competing retailers such as Walmart, Target, Costco, and Kroger down as much as 13% as Wall Street investors tried to understand how Amazon’s new purchase will change the grocery industry.
In a statement, Jeff Bezos, Amazon founder, and CEO said why Whole Foods Markets is a great business model.
“Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy.” Bezos added, “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.”
John Mackey, Whole Foods co-founder, and CEO reveals how this partnership will change the grocery retail chain. “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.”
Following the news of the deal, Whole Food Market will continue to operate under the name and brand of Whole Food Market and source their goods from trusted vendors and partners. John Mackey will remain as the company’s CEO, and the headquarters will continue to stay in Texas.
Before the deal is finalized, it has to be approved by Whole Foods Market’s shareholders, regulatory officials and other closing conditions. The deal is expected to close by the second half of 2017.
Whole Foods presents a new opportunity for Amazon. Amazon Go introduced a grocery retail world where individuals can go grocery shopping without a checkout counter. Now, with hundreds of Whole Foods Markets across the country, Amazon can implement this new technology and disrupt the entire grocery retail industry. In fact, a report released by the Council of Economic Advisers found that technology will replace nearly all jobs that earn $20/hour and if Amazon decides to implement Amazon Go into Whole Foods, this could potentially change consumer shopping forever.