Winners in the Amazon-Whole Foods Deal

NEW YORK-Online juggernaut Amazon is buying Whole Foods in a deal valued at about $13.7 billion, a strong move to expand its growing reach into groceries.

Well, we certainly weren't expecting to hear this morning that Amazon plans to acquire Whole Foods for $13.7B. "Whole Foods Market has been satisfying, delighting and nourishing customers for almost four decades - they're doing an fantastic job and we want that to continue".

The aquisition of the high-end, elite grocery store chain specializing in organic food, with 456 locations, will allow Amazon to integrate brick-and-mortar retail into its operations, and also move into the grocery industry. Until now, Amazon has largely focused its grocery efforts around its Amazon Fresh subscription service, which promises quick food delivery for online orders.

The company, which had sales of almost $136 billion in 2016, accounted for 43 percent of online retail sales in the United States previous year, according to Slice Intelligence, a San Mateo firm that analyzes e-commerce trends.

But once the deal is complete and WFM is wholly in the Amazon fold, quite a bit is expected to change - and not just on the grocery front.

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"This is the most disruption the grocery industry has seen in the last half-century", said David Ciancio, a former Kroger executive and a strategist at consumer-data company dunnhumby.

Mackey will stay as Whole Foods CEO, and the headquarters will stay in Austin, Texas.

The grocery store business has been rapidly changing, but today that change just might have gone into overdrive.

At least one customer was concerned that an Amazon purchase would further distance Whole Foods from its roots as a purveyor of premium, organic and specialty foods. Amazon (amzn) shares surged more than $23 Friday, an increase of about 2.4%.

Despite Amazon's reputation for harnessing technology, a prototype store inside its corporate office in Seattle, called Amazon Go, which uses sensors and tech-savvy cameras to detect shoppers' selections and then charge their Amazon accounts, has rolled out more slowly than planned, a person familiar with the matter said.

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Amazon is a beast in the world of online retailers.

"For the most part, it's too expensive for me to do all may shopping there", said Mary Funari, a Whole Foods shopper. "Why is Amazon going to let a third party vendor take margin off of their sale?" That should benefit Whole Foods as it tries to return to sales growth.

Amazon already offers a home delivery service for groceries in certain markets.

Since its founding 23 years ago, Amazon.com has upended the business of selling books, music and just about everything else we consume - except food. However, Whole Foods does not have access to Instacart's financial numbers and analytics.

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