Shoppers may see big changes after Amazon buys Whole Foods


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Whole Foods operates approximately 30 stores in MA.

"Supermarkets will now have to contend with not only competition with each other and non-traditional grocers like Wal-Mart Stores Inc and Target Corp TGT.N , but with a retailer like Amazon which has the financial capacity to price aggressively", said Mickey Chadha, vice president and senior credit officer at Moody's Investors Service.

Amazon has already put a toe in the water of the $675 billion US retail grocery sector with food delivery services like Amazon Fresh and Amazon Prime Now.

But Jana sure had good timing, and now they're poised to make about $300 million on a stake in Whole Foods (wfm) they had only disclosed in April, Reuters reports. Her daughter Bethany Capels agrees and says she likes Whole Foods for the organic fruits she can serve her kids. The grocery store operator was also under pressure from activist investor Jana Partners.

GROCERY SHOPPING: Online juggernaut Amazon said it will buy organic grocery company Whole Foods for more than $13 billion, or $42 a share.

"I think that this takes all of the pressure off Whole Foods and gives Whole Foods the opportunity to revitalise that business and, of course, it stems the criticism from all of these activist investors", said Neil Saunders, managing director of GlobalData Retail in NY.

"Amazon could bring technology to all Whole Foods locations, or it could absorb Whole Foods into AmazonFresh".

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GOING ORGANIC: Many big retailers have started trying to sell more groceries in the last few years to try to capitalize on shoppers' yen for fresher, more natural food.

"They (Amazon) always try to offer the best price, which is good for the customer, but not good for the brand", Motkin said.

The company also has been testing sensors at a convenience store in Seattle to track items as shoppers put them into baskets or return them to the shelf. Pachter said Amazon might get customers over those fears if they know the delivered items are the same as those they would find at the local store.

With Whole Foods, Amazon gets an established business that it can transform through its technology and supply network expertise. "It's probably like the flawless match right", Whitney Winchester said.

While the transaction is subject to approval by Whole Foods' shareholders, regulatory approvals and other customary closing conditions, the two parties expect to close the deal during the second half of 2017. That could change if Amazon not only cuts operational costs but passes those savings onto customers. "I think this will open a whole new set of challenges for Amazon, as the inventory control, and associated distribution, will require an additional set of capabilities", Smith said.

"This store has become a money-making machine", said Tony Castro, a 40-year-old private chef, who shops daily in Whole Foods' sprawling downtown Los Angeles store. I am not convinced Amazon is using Whole Foods to conquer the world. "Now supermarkets and grocers will have to compete not only with each other and with nontraditional rivals like Wal-Mart and Target, but with Amazon", Carmeli said.

Online delivery of groceries so far has been tough for any company to pull off because of customers' concerns about the quality of meat and produce, Wedbush Securities analyst Michael Pachter said. It has a total of 460 stores, most of which are in the... "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. He added that these are likely the higher-income households who tend to buy more expensive brands and cuts of meat. Walmart, which has the largest share of the US grocery market, is ramping up its grocery services as a way to fuel online sales.