Amazon Said To Plan Cuts To Shed Whole Foods' Pricey Image


Whole Foods, founded in 1978, has more than 460 stores in the United States, Canada and the United Kingdom, employs 87,000 people and is the leading natural and organic foods supermarket. The announcement came days before another German-based company - Lidl - began its USA invasion by opening 10 stores along the East Coast.

Ocado plc (OCDDY) shares surged the most in almost a year Monday on speculation that it could become an acquisition target for Amazon Inc.

Whole Foods Market will continue to operate stores under its current brand and Mackey will maintain his position at the company.

Completion of the transaction is subject to approval by Whole Foods Market's shareholders, regulatory approvals and other customary closing conditions.

Groceries are already a fiercely competitive business, with low-priced rivals like Aldi putting pressure on traditional supermarket chains and another discounter, Lidl, opening its first US stores just this week.

"For Whole Foods Market, this deal is probably one of the few that allows the business to continue operating along existing lines".

Shares in the Australian supermarket giants came under pressure today after Amazon dropped the bombshell overnight on Friday that it was buying high-end grocer Whole Foods Market for $US13.7 billion ($18 billion).

Amazon declined comment on competition with Walmart but spokesman Drew Herdener said in a statement the company has no plans to cut jobs or use technology in development at its Seattle Amazon Go store to automate jobs of cashiers. Get Fully Charged, from Bloomberg Technology.

The acquisition could pose a bigger threat to Target, which has been building smaller stores in cities like NY to attract the affluent urban shoppers coveted by Whole Foods and Amazon, said Kurt Jetta, chief executive officer of TABS Analytics, a consumer products research firm.

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Both companies said there will be no layoffs, but they did not respond to other questions about Amazon's plans for Whole Foods.

"Whole Foods changes that dynamic".

IGA supplier Metcash is also not an expected takeover target, Mr Raymond said, due to Amazon's Whole Foods acquisition being about securing a retail footprint in the USA - a move it is not expected to replicate in Australia.

"That (Whole Foods 365) may become a big problem for Wal-Mart", Grant said.

It might sound dumb, but the reason so many shoppers are starting their product searches on Amazon is because they'd prefer to buy things from Amazon. It is a market that remains stable even in times of economic stress as consumers will always need to buy food, making it a steady market to invest in. Or someone who buys granola bars monthly from Whole Foods and paper towels every other week from Amazon might be offered the items in a single shipment, delivered to the door.

It also has been trying to shrink shipping costs.

The one Amazon Go location opened previous year in Seattle was a sort of alpha test, open only to Amazon employees, but the company said when they announced the idea that they would be opening more stores of the same type to the general public "in early 2017".

The stores could also showcase gadgets such as Kindle e-readers and Fire tablets. The upsides are that it is cheaper than the Amazon Fresh service that delivers to your door and it is even faster - you can have your pickup ready at the store within 15 minutes of placing the order.