Goldman advised Amazon.com Inc and Evercore advised Whole Foods Markets Inc on Amazon's $13.7 billion acquisition of Whole Foods that will see the US organic grocery chain become part of the world's largest internet retailer.
The online giant past year declared its plans to open a physical grocery store called Amazon Go, a market without cashiers where consumers would be automatically charged based on the items they placed into their shopping bags. It has recently opened a few bookstores and plans additional ones at San Jose's Santana Row and in Walnut Creek.
While their merger 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. But analysts familiar with e-commerce and retail said the ramifications will be felt throughout both industries.
Amazon already offers grocery-delivery services in five markets, but analysts say expansion is tough because its current distribution centers are set up for dry goods, not perishables. With a $13.4 billion purchase, Amazon is stepping up its game and hoping to get an even stronger foothold in the retail market.
"We want to assure you that Amazon shares Whole Foods Market's deep commitment to quality and customer service".
At least one local shopper at the Andover Whole Foods store had a much different perspective on the deal.
After the Whole Foods announcement, stock prices for Wal-Mart, Target and Costco sank. "You have to pick and choose what you buy". However, Whole Foods does not have access to Instacart's financial numbers and analytics.
Hauptman said millenials will likely change how food stores market and sell their products.
Whole Grocer, which was founded in 1978, would continue to operate under its existing brand. 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. Mr Bezos is known for making unconventional decisions and having big ambitions, and this could mean a more frontal assault on Walmart - a face-off between the old and the new dominant forces in the retail world. "The impact could be vast and generational".
- Target. The retailer fell $2.85, or 5.1 percent, to $52.61. "Why is Amazon going to let a third party vendor take margin off of their sale?"
With this strategy, Amazon is planning to make the prices competitive and attract "more low- and middle-income shoppers" to its retail stores, which may still be located in posh localities.
Yet the prospect of Amazon knowing more about San Jose's Dave Dineen, 55, who works as a dog walker, didn't faze him. "A lot of people will love that", said Whole Foods customer Brad Anderson. Whole Foods CEO John Mackey had lambasted the hedge fund as "greedy bastards."
Amazon is buying Whole Foods. But competition with other organic grocery stores has become pretty stiff in recent years.
The shock that many people felt when looking at their receipts gave Whole Foods the pejorative nickname "Whole Paycheck".