The online retailer announced the acquisition on June 16th, which analysts predict will increase its competition with Walmart
By NACS Online
Online retailer Amazon.com has announced it will acquire the Whole Foods supermarket chain for $13.7 billion, the New York Times reports. The deal pushes the competition between Amazon and Walmart to new heights, some analysts said. The U.S. grocery industry has annual sales between $700 and $800 billion.
The deal allows some breathing room for Whole Foods, which has been pressured by mediocre stock prices. The upscale grocery chain recently replaced much of its board, added a new CFO and developed plans to slash costs and tweak operations.
For Amazon, the deal coincides with its expansion offline to brick-and-mortar locations, such as Amazon Go and its bookstores. In its hometown, the online retailer also opened two drive-thru windows for grocery pickup of items ordered online. Whole Foods had more than 460 stores in Britain, Canada and the United States.
“Although industry revenue is only set to rise at an annualized rate of 0.8% over the five years to 2022, the transaction will allow the online retail giant to boost not only its grocery sales, but expand its brick-and-mortar presence,” IBISWorld Industry Analyst Madeline Hurley said in a statement emailed to press.