Mainers wary of Amazon/Whole Foods deal

Jay Anderson
June 20, 2017

The technology lets people pay with smartphones without seeing a cashier or going to a checkout kiosk, which would help Amazon differentiate itself in the brick-and-mortar setting and reduce labor costs at Whole Foods stores.

"Very few entities could outbid" Amazon, Short 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.

He said the move also suggests that the future of grocery retail is not just online, where profits are gobbled up by the complex and costly need to deliver food. The report added that Amazon wants to make the high -end grocer more competitive with Walmart and other mass-market retailers.

Her new target was the result of combining her "upside" scenario, which contemplated a "take-out" multiple of nine times EBITDA for a price $57 a share, and a downside scenario of $42 per share, should Amazon.com's current offer finally prevail. But he said he's looking for ways to modernize elements of the "show" his stores put on - such as the singing animatronics - to ensure that grocery shopping remains a family event.

"Amazon is taking over the world because that's a real big switch", says Ishmael McIntosh, from Baltimore, a former Whole Foods worker.

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An Amazon spokesman denied that job cuts are in the works for Whole Foods. That fits with Whole Foods private-label push to compete on price, and gives Amazon a bigger foundation on which to develop its own food brands.

"The Whole Foods Market acquisition represents a game changer with Costco's competitive advantage in grocery under greater threat while its digital platform lags peers, putting membership renewal at risk for decline", Deutsche Bank analyst Paul Trussell told his clients Monday, CNBC reported. Short term, Amazon is trying to get a stronger foothold in the grocery business but what happens after that is still anyone's guess. Amazon accounts for less than one percent of the grocery spending market. About 20% of the grocery business is anticipated to be online in the next couple of years, as per the source.

The deal was set in motion when Mackey and fellow executives Jason Buechel, Ken Meyer and David Lannon flew up to Amazon's Seattle headquarters, according to a transcript of a town-hall meeting held Friday with employees. By acquiring Whole Foods, Amazon now owns a familiar name with a lot of value in the market.

"To hear that it's actually buying an existing retailer confirms its intentions in the area and that obviously leads to further competition in what is already a fiercely competitive market", said Laith Khalaf, an analyst at Hargreaves Lansdown.

"The goal of all of this is to make it easier to buy", he says.

Other reports by BadHub

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