Groceries are already a fiercely competitive business, with low-priced rivals like Aldi putting pressure on traditional supermarket chains and another discounter, Lidl, opening its first USA stores just this week. Shares of Amazon and Whole Foods were up 2 percent and 29 percent respectively.
With some 430 Whole Foods stores across the nation, Amazon is expected to make local deliveries faster via its grocery delivery service AmazonFresh. Shares for Walmart, the largest US grocer, went down more than 6 percent, Target shares were down more than 10 percent and Costco shares were down more than 7 percent, USA Today reported. "They're already delivering pre-packaged grocery items".
"The conventional grocery store should feel threatened and incapable of responding", Pachter said.
The announcement has sent traditional grocery stores and chains such as Target and Walmart scrambling. It announced Friday that it's buying online men's clothing retailer Bonobos for $310 million in cash, following a string of online acquisitions including ModCloth and Moosejaw. Under the terms of the deal, John Mackey would remain CEO of Whole Foods, according to a report from MarketWatch.
Number of Whole Foods stores: 460 in the U.S., Canada and the UK. Amazon is buying Whole Foods Market: a $13.7 billion deal.
So what's leading to all this pharmaceutical heartburn over a grocery-retail deal?
"Maybe feels hyperbolic but I think it could be one of the biggest acquisitions in the last 20 years in terms of the ability to kind of bring together technological innovation and this sort of physical footprint that Whole Foods has", Bunch said. Amazon has become one of the Lehigh Valley's largest employers since it opened a warehouse complex in Breinigsville in 2010. The Seattle-based company was recently granted a patent for technology that would block shoppers from comparing prices from their mobile devices while they're in stores. The shopper's Amazon account gets automatically charged.
"I would not like to be somebody playing in the grocery space right now", said Jan Rogers Kniffen, chief executive of retail consultancy firm J. Rogers Kniffen WWE in NY. Amazon and Whole Foods both have a presence in the Lehigh Valley. The grocer will keep its corporate office in Austin and continue to use the Whole Foods name after the sale. After all, the US #Grocery Market is valued at $800 billion and there is a lot of money to be made for the right companies.
Mackey has referred to Whole Foods as his "baby". The natural foods retailer helped start a trend toward natural and organic foods, but its stock has struggled in recent years and recently the company shook up its board and said it would cut costs.