Amazon now a fully fledged grocery giant with $13.7bn Whole Foods takeover

16 Jun 201718 Shares

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A Whole Foods store in New York. Image: a katz/Shutterstock

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Amazon is attempting to secure its future in the retail shopping space with the purchase of Whole Foods for $13.7bn.

After years of dominating the e-commerce space, Amazon has made it clear that it is now looking to move into the bricks and mortar world as well. Next target: supermarkets.

The company has revealed that it has agreed to buy luxury brand supermarket Whole Foods for $13.7bn, giving it incredible reach with more than 460 stores across North America and the UK.

Last year, the supermarket – which employs 87,000 people – had sales of approximately $16bn. This purchase could be used as an attempt to jump-start Amazon’s plans for Go stores, where customers come and go without scanning items through a till.

Great for Whole Food’s shareholders

“Millions of people love Whole Foods because they offer the best natural and organic foods, and they make it fun to eat healthy,” said Jeff Bezos, Amazon founder and CEO.

“Whole Foods has been satisfying, delighting and nourishing customers for nearly four decades – they’re doing an amazing job and we want that to continue.”

Meanwhile, Whole Foods’ CEO and co-founder, John Mackey, said the major deal will be welcome news to the company’s shareholders.

“This partnership presents an opportunity to maximise value for Whole Foods’ shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers,” he said.

While the move remains subject to approval, both parties expect the deal to be completed by the second half of this year.

Amazon Go’s future

Announced towards the end of last year, Amazon Go was seen as a major overhaul of the supermarket sector. The concept envisages a store filled with sensors that track a customer’s shopping items as they move around the store.

When their shopping is complete, the customer then walks out with the items. The cost is deducted automatically from the customer’s account upon exiting the store.

However, Amazon’s plan to open one of these stores has not been without problems. Due to technological teething issues, a grand opening scheduled for March was delayed until later in this year.

Back within the field of e-commerce, Amazon is also set to expand its grocery offerings online, with services such as Amazon Fresh bringing it into the grocery delivery service – for Amazon Prime customers, at least.

It was confirmed today that the company is not planning to buy productivity software company Slack, an acquisition that would have brought the latter’s value to $9bn.

A Whole Foods store in New York. Image: a katz/Shutterstock

Colm Gorey is a journalist with Siliconrepublic.com

editorial@siliconrepublic.com