Will Amazon Dominate Food Retail with Whole Foods Purchase?

By Tinuiti Team

Today, Amazon announced they will acquire Whole Foods Market for $42 per share in an all-cash transaction valued at approximately $13.7 billion.

As far as we know, Whole Foods Market will continue to operate stores under the Whole Foods Market brand and source from trusted vendors and partners around the buys whole foods

John Mackey will also remain as CEO of Whole Foods Market and Whole Foods Market’s headquarters will stay in Austin, Texas.

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

Founded in 1978 in Austin, Texas, Whole Foods Market is the leading natural and organic foods supermarket, the first national “Certified Organic” grocer, and uniquely positioned as America’s Healthiest Grocery Store™.

In fiscal year 2016, the Company had sales of approximately $16 billion and has more than 460 stores in the United States, Canada, and the United Kingdom.

But according to some experts, Amazon’s purchase of Whole Foods comes as no surprise.

Recently, investors have criticized Whole Foods for its poor performance and urged the company to sell or merge with another grocer.


“Smart buy, Whole Foods has been suffering for a while,” Kestrel Lemen, Email Marketing Manager, Retail at CPC Strategy said.

“Especially because of distributors like online grocery and cheaper, but still organic options like Trader Joes. They’ve had to close stores all over the country.”

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Can Amazon Dominate Food Retail?

Without a doubt, Amazon is eyeing an “emerging opportunity” within the grocery business.

Reports indicate 23% of American households are buying food online today and those numbers are expected to grow. Of those that will buy online, 60% expect to spend over a quarter of their food dollars online in ten years.

niiJim Cramer, host of “Mad Money”, called Amazon’s purchase of Whole Foods a “game changer” for the food industry on Friday.

“They will now dominate food within the next two years.”

But not everyone feels the same way.

“This is an interesting play but it should be noted that Amazon has been historically poor at integrating non-tech/IP acquisitions into it’s core business (IMDB, DPreview, Zappos, Kiva Systems, and Twitch) just to name a few,” Nii Ahene, Co-founder, COO at CPC Strategy said.

“I can see them running Whole Foods as a portfolio business and a training grounds for management to gain a better understanding of the grocery business to inform the growth of Amazon Fresh but I don’t see Whole Foods footprint expanding or the stores being rebranded to Amazon stores.”

For more on Amazon’s purchase of Whole Foods Market, email [email protected]


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