Amazon To Buy Whole Foods Market For $13.7 Billion

NEW YORK, NY — Online sales juggernaut Amazon will acquire the upmarket grocer Whole Foods for $13.7 billion, the companies announced Friday morning.

“Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,” said Amazon founder and CEO Jeff Bezos. “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.”

Amazon will acquire the grocery store chain and its debt outright. (For more national stories, subscribe to the Across America Patch and receive daily newsletters and breaking news alerts.)

Since it came on the scene in the 1990s, Amazon has expanded rapidly and shifted the course of the entire retail sector. With an inventory originally limited to books, Amazon's business has expanded its reach over the decades to include nearly every consumer good that can be shipped. In recent years, Amazon has shown an interest in entering the grocery market and experimenting with innovative brick-and-mortar locations. Bezos personally bought the Washington Post in 2013.

John Mackie, Whole Foods' CEO and co-founder, stressed the benefits of the sale to the company's shareholders, who still have to approve the deal.

“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,” he said.

“This is an earthquake rattling through the grocery sector as well as the retail world," said Mark Hamrick, senior economic analyst at Bankrate.com. "We can only imagine the technological innovation that Amazon will bring to the purchasing experience for the consumer. Now, we can see in hindsight that its recent dithering around the brick-and-mortar experience, as an experiment, was only a rumbling of the seismic event in the offing.”

He continued: "This will be a good deal for consumers, including those who might not have been doing business with Whole Foods in the past, either because of its positioning in the organic branding space or because prices have been seen as high. Amazon can be expected to work to deliver better value to grocery customers, both online and within the brick-and-mortar space.”

Many market watchers noted that while Amazon' stock price got a boost from the announcement, other grocers' stocks, including Kroger, Costco, Supervalu and others took a hit when the news broke.

“A day earlier, Kroger stock posted a double-digit decline amid food price deflation and stiff competition in the grocery space," Hamrick said. "We had no idea what was in the offing, almost immediately. For it and other long-existing players in the space, they have to be wondering whether a competitive time bomb has begun clicking. It will be particularly changing for the public-traded players in the space, where shareholders will be demanding an aggressive response to this shot fired by Amazon.”

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