Amazon's stock was up 3.6 percent.
The Whole Food purchase price topped $13.7 billion dollars in cash. It implies a trailing 12-month price-to-earnings multiple for Whole Foods of 31 times, versus a 14.4 average for the S&P 500 Food Retail index.
This deal points towards Amazon's big focus on the grocery business, especially in the US.
The deal sent shockwaves across the food distribution market and beyond. Those stores would solve much of Amazon's "last-mile" delivery challenge for fresh groceries - perhaps the top reason it hasn't made a dent in the grocery shopping of the 60 percent of millennials who buy other items from Amazon, he said.
"The conventional grocery store should feel threatened and incapable of responding", Pachter said.
Charlie O'Shea, a Moody's lead retail analyst, told the Associated Press news agency that the deal could be "transformative, not just for food retail, but for retail in general". While both companies aren't headquartered here - check out Austin Inno for the deal's impact on Whole Foods' home base - the deal is certainly going to have an impact here and everywhere else across the country, if only due to their collective reach.
"I think that this takes all of the pressure off Whole Foods and gives Whole Foods the opportunity to revitalise that business and, of course, it stems the criticism from all of these activist investors", said Neil Saunders, managing director of GlobalData Retail in NY. And the company has launched an offshoot chain named after its "365" private label brand, a nod to the popularity of no-frills chains that draw shoppers with low prices. Online juggernaut Amazon announced Friday, June 16, 2017, that it is buying Whole Foods in a deal valued at about $13.7 billion, including debt.
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While analysts do not know for sure yet what the impact will be, stock prices today for Amazon and Whole Foods shot up Friday, while prices for traditional retailers like Walmart, Target, Kroger, and Cosco fell.
Amazon could try to cut operational costs at Whole Foods by using the same types of robots that already move inventory around at its e-commerce fulfillment centers. The other sections, not to demarcate them, are most likely pissed for not having access to the organic and natural products. "Whole Foods is expensive enough".
"Amazon is an innovative company and we are excited about our partnership".
A former grocery expert at Amazon predicted that the chain, nicknamed "Whole Paycheck", would add a selection of discounted food and build out non-grocery areas within stores, particularly for pharmacy and Amazon devices.
Courtney Hiddeman and her family live right down the street from the Whole Foods "world headquarters" on Bowie Street in Austin. Earlier this week rumors were swelling that Amazon had its sights on acquiring messaging technology company Slack, turns out it was Whole Foods that would be first. Amazon, which for years has been testing new technology and innovations in quiet corners, would now have a network of physical locations to test and implement those ideas. The same goes for Shipt, an Alabama-based grocery delivery service that's also a Whole Foods partner. "It's just curious, isn't it, that Amazon has offered so many things online". Shoppers simply pick the items they want off the shelves and leave the store. The company reshuffled its board and appointed a new chief financial officer in May after reporting the seventh-straight quarter of falling same-store sales, a key indicator of retail performance.
"Instead of deliver to my home, why not just come down here?" This acquisition may pave the way for even more of those kinds of stores, Hurley said.