Amazon Deal For Whole Foods Could Bring Retail Experiments


Despite this report, an Amazon spokesperson directly told Bloomberg that it has no plans to use the sans checkout technology to cut cashiers.

Most of these firms would have the same goal in mind: keeping, Inc. out of the market.

Mackey has been facing investors’ ire because of his strategies that were thought to have resulted in Whole Foods’ poor performance.

At a Whole Foods employee meeting on Friday, CEO and founder John Mackey proclaimed his excitement about Amazon’s acquisition and gave some colorful background on how the deal went through.

A $48-a-share price tag would be more than reasonable for a fellow retailer that could eliminate overhead at Whole Foods, Short said, while adding that very few companies could outbid Amazon.

In his address, Mackey hinted at his answer to one of the big questions hanging over the Amazon-Whole Foods merger.

The online retail giant’s surprise acquisition of Whole Foods comes at a time when Amazon has been inserting itself into the grocery market, and Whole Foods had been cutting prices.

Amazon, meanwhile, isn’t “stupid enough” to change Whole Foods’ brand, Mackey said at the town hall. Through Whole Foods, Amazon would gain a national store footprint in the USA along with a presence in Canada and the U.K, with over 460 stores in total. It has been making efforts to grow its online presence, buying the online apparel vendor Bonobos for $310 million and offering free, two-day shipping on millions of items. At the meetup in Seattle six weeks ago, the executives spoke with Amazon for 2 1/2 hours, Mackey said.

Yes, the company that climbed its way to the top on the back of “show-rooming” – when customers in a bricks-and-mortar store go online while shopping in order to compare prices – now may try to prevent that from happening. Cowan Co.’s data indicates that those Costco-Prime members are visiting Costco less, so once Amazon owns Whole Foods and extends Prime’s footprint into Whole Foods, Costco could lose out even more to the Amazon-owned grocery chain.

One of the most likely reasons for the premium on Whole Foods Market stock is the existence of other bidders.

Mackey expects Whole Foods to adopt the Amazon mantra focused on long-term growth and a better customer experience rather than concerns for short-term profits that please investors.

A source familiar with the matter say Amazon may roll out some (possibly extreme) cost-cutting measures to lower prices across the board at Whole Foods.

While many of Whole Foods stores are not now setup for drive-in and pickup, adding that capability would create big synergies with Amazon’s e-commerce business by reducing last-mile delivery costs, says a Citigroup report published on Tuesday.

The Whole Foods deal could also get more people to try grocery delivery, something many shoppers have been hesitant about because of concerns about meat and produce quality.


Will Grocery Stores Die an Early Death?

Whole Foods Market