For Whole Foods workers, fears of robots, drones and culture clash

Isaac Cain
June 19, 2017

Supermarket stocks and shares of companies that sell groceries are now spoiled in the eyes of investors after Amazon announced a almost $14 billion purchase of Whole Foods Market on Friday.

Amazon's purchase of Whole Foods also brings disruption to the $700 billion USA grocery sector, a traditional area of retailing that stands on the precipice of a ferocious price war.

Whole Foods has posted seven straight quarterly sales declines at established stores and recently overhauled its board of directors in the face of pressure from activist hedge fund Jana Partners LLC.

But Michelle Grant, head of retailing at market research firm Euromonitor, said Amazon could use an obscure part of the Whole Foods portfolio - Whole Foods 365 - to lure Wal-Mart shoppers.

Amazon is buying Whole Foods for $13.7 billion. Indeed, shares in competitors sank in early NY trading.

The online giant is buying the high-end grocer for $US42 a share, valuing the company at $US13.7 billion.

Whole Foods Market will continue to operate stores under the Whole Foods Market brand.

The deal, which began when Amazon CEO Jeff Bezos approached Whole Foods CEO John Mackey about the aquisition, was brokered and advised by Goldman Sachs Group Inc.

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The deal is expected to close in the second half of 2017, pending shareholder and regulatory approvals. The store was his baby, and they'd have to, quote, "knock daddy out to take it over".

"It's too soon to say if we would reconsider or change anything" about the relationship with Amazon Prime Now, Hardy said.

"Amazon's brutal vision for retail is one where automation replaces good jobs".

Some investors in the United Kingdom and Europe also saw the purchase as a sign that Amazon could take its grocery ambitions global.

In a convergence of online and traditional retailing, Amazon is buying Whole Foods Market, Inc., for $13.7 billion in cash. However, Whole Foods does not have access to Instacart's financial numbers and analytics.

For now, though, Whole Foods cashiers and other employees can take a sigh of relief.

Following Amazon's move to plant a bigger stake in the food-selling business, shares of Walmart tumbled 4.6%, making it the biggest loser in the blue-chip Dow Jones industrial average. "That is the reality today at Amazon, and it will no doubt become the reality at Whole Foods", said UFCW President Marc Perrone in an email. The company is pursuing a huge acquisition that might make you think it is.

West Hartford resident Nancy Kennedy, 88, who stopped by the Whole Foods store to shop, said she does not go online because she's not familiar with digital technology. It also has expanded its prepared food business. Based on his forecasts, Amazon will likely rank as the ninth largest USA grocery retailer this year - though he expects it to assume third place by 2021, behind only Walmart and Kroger.

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