Amazon to Buy Whole Foods Market

Originally published by Path to Purchase Institute.

E-commerce giant Amazon.com is buying alternative grocer Whole Foods Market for $13.7 billion. 

Whole Foods operates 440 stores in 42 states and Washington, DC. It also has 12 stores in Canada and nine in the UK. The company had $16 billion sales in fiscal 2016 (ended Sept. 25, 2016).

The all-cash transaction is expected to close later this year and is subject to approval by Whole Foods' shareholders, standard regulatory scrutiny and other customary closing conditions. 

“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,” John Mackey, Whole Foods Market co-founder and chief executive officer, said in a media release.

According to Amazon, the chain will continue to operate under the Whole Foods banner, Mackey will remain ceo and the grocer will retain its Austin, TX, headquarters. 

The deal is a good indication of Amazon's growing interest in grocery and brick-and-mortar stores. It could also give Whole Foods a much-needed shot in the arm amid recent declining same-store sales.

"I think this will be the beginning of a huge network of pick-up points for Amazon, and it will take costs out of the system because it won't have to run delivery trucks to individual households," said Steve Frenda, managing director of community development for the Path to Purchase Institute. "Additionally, the opportunity to have that 'endless aisle' is enhanced."

“The marriage of Amazon data and Whole Foods' bricks-and-mortar [operation] is just the beginning," Joe Robinson, president of marketing agency Catapult, said. "This marriage can envelop the entire food and CPG business."