Amazon.com Inc. announced plans on Friday to buy Whole Foods Market in a move that finally gives the online retail behemoth a serious brick-and-mortar presence.
The $13.7 billion deal supercharges Amazon’s decade-long quest to take on the supermarket business, which accounts for up to $800 billion of U.S. consumer spending. Amazon began experimenting with food delivery in 2007, when it first launched AmazonFresh near its Seattle headquarters.
Now, with Whole Foods’ 431 stores, located in mostly upscale neighborhoods of major cities, the company becomes a top player overnight. The acquisition also enthrones Amazon as the new boss of nearly 91,000 employees in the retail industry it’s helping to erode by popularizing online shopping. And the tech giant’s arsenal of newfangled sensors and software to eliminate cashiers could bode ill for many Whole Foods workers.
“Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,” Jeff Bezos, Amazon founder and chief executive, said in a statement on Friday. “Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades ― they’re doing an amazing job and we want that to continue.”
But Whole Foods isn’t just a supermarket. The grocer already serves as a hub for organic eateries, too.
“Whole Foods is not just about natural foods; Whole foods is about a shopping experience,” David J. Livingston, a supermarket research consultant, told HuffPost by phone. “Whole Foods is a quasi-restaurant. You go into Whole Foods, and you have a bar, three to four different restaurant options inside.
”Whole Foods stores feature oyster bars, barbecue spots, cafes, sandwich shops, pizzerias and sushi restaurants, Livingston said. Practically synonymous with gentrification, the grocer is located in dense, urban centers where incomes tend to be higher. There are nine Whole Foods stores in Manhattan alone.
“You don’t differentiate yourself in the food business by selling Hellmann’s mayo, ketchup and soup,” Howard Davidowitz, chairman of the New York-based retail consultant and investment banking firm Davidowitz & Associates Inc., told HuffPost. “You differentiate yourself on your service offerings. Amazon understood that people are always going to go to food stores.”
That gives Amazon a significant leg up on its chief rival, Walmart.
Walmart, the world’s biggest retailer, has long dominated the discount market. Last August, the company bought Jet.com, the so-called “Amazon killer” founded by one of Bezos’ former executives, in an effort to bolster its lagging online offerings and compete head-to-head with Amazon.
Walmart’s e-commerce sales grew 63 percent year-over-year…
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