Amazon shakes up retail with $13.7bn Whole Foods deal

Amazon shakes up retail with $13.7bn Whole Foods deal

Amazon's philosophy has been hard on many of its retail competitors, who have closed their doors in part because of online competition. The accusation will now spread to the national grocery business. NPR's Alina Selyukh reports. Whole Foods already has a lot of in-store dining and lots of prepared foods.

Online delivery of groceries so far has been tough for any company to pull off because of customers' concerns about the quality of meat and produce, Wedbush Securities analyst Michael Pachter said.

CHRIS DORSEY: Higher-end foods, locally sourced, organic, vegetarian, vegan-friendly. Activist investors bought a significant stake in the Austin-based company. In some cases, local governments have blocked Wal-Mart's plans to build stores. Here he is in an interview earlier this month with NPR's Allison Aubrey. "This deal gives them credibility with consumers and a major foothold in that space".

"They really want to be communicated with the way they want to be communicated with", Hauptman said. They're mostly about their own short-term financial interests. The giant retailer sells the most groceries than any other retailer. The shopper's Amazon account gets automatically charged. But today's development will bring it more than 430 retail locations across the country, a substantial base from which it can expand its empire into the physical realm.

The acquisition, expected to close this year, is more than 10 times larger than what Amazon spent on its next-biggest deal, the purchase of online shoe retailer Zappos in 2009.

By acquiring Whole Foods, Amazon is buying not just an established, upscale supermarket brand, but also a vast distribution network of warehouses and more than 460 stores worldwide - replete with back rooms and cold storage - in some of the most affluent ZIP codes in America.

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"Amazon can now answer the question, What are we having for dinner", he says. But its stance could attract rival grocers to partner with Instacart in a broader bid to resist Whole Foods' new corporate resources.

"I wish I could, but I don't know how to use the internet", she said.

On Friday, Wal-Mart said it would buy Bonobos, a popular internet apparel retailer; previous year, it acquired Amazon competitor Jet.com and appointed that company's chief executive, Marc Lore, to strengthen its e-commerce operation. "The strategic reasons are that Amazon can put the other bidder out of business, and Whole Foods' investment in delivery creates an instant offense against Amazon Fresh delivery".

"They (Amazon) always try to offer the best price, which is good for the customer, but not good for the brand", Motkin said.

Alina Gura of Newington who was visiting the Whole Foods store with her almost two-year-old daughter, said she appreciates the quality of the food, particularly its organic products.

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