Amazon is buying Whole Foods in $13.7B deal

Mackey helped grow the company from a tiny health-conscious grocer in Texas into a giant in upscale chain in all but eight USA states.

"I like picking out my own stuff", Hall said.

"We're becoming a giant corporation in the USA", she said.

The deal represents a dramatic turn in strategy for Amazon, which has offered food delivery through its Fresh service for a decade but has not made a major dent in the $700 billion grocery market.

"This is an natural disaster rattling through the grocery sector as well as the retail world", said Mark Hamrick, senior economic analyst for

Kroger, the Ohio-based grocery chain, also could make a run at Whole Foods, though its stock was torched today, dropping nine percent after the Amazon-Whole Foods deal was announced.

The almost $14 billion deal is the largest purchase in Amazon's history. "That means we can rely upon Whole Foods' consistently high quality meat and produce, and can rely upon prompt delivery from the store as a distribution point".

And because customers can buy foods and bulk items like toilet paper from a single retailer, discount retailers such as Costco, Target and Walmart should feel threatened, too. "A lot of people will love that", said Whole Foods customer Brad Anderson.

Yes, we'll continue to see prepared foods in demand.

Food industry experts say the online giant tapping into the brick-and-mortar world is a game-changer for traditional grocery chains. Meanwhile, the more than 460 Whole Foods stores in the U.S., Canada and the United Kingdom could be turned into distribution hubs - not just for delivering groceries, but also as pickup centers for online orders.

"People are willing to give that up and allow a trusted brand to pick their product", Hauptman said. "The checkout-free experience in Go is not yet ready for prime-time as it is still only being beta-tested by AMZN employees, but we believe the Go technology could be rolled out to physical retail, including Whole Foods, over time". As a matter of fact, all parties are expected to close the transaction during the second half of 2017. However, the merchandising will emerge more slowly as a system is developed, Hauptman said.

And it shakes up a USA grocery industry that has been struggling to keep up with growing competition, both in stores and online. Amazon also offers grocery shipments elsewhere, but that's tough with perishable foods.

SAM BERNSTEIN: I don't know.

Stacy Mitchell, co-director of the Institute for Local Self-Reliance, a non-profit that advocates for the development of local communities, called for antitrust regulators to block the deal, which she said "would dramatically amplify Amazon's online market power". Younger customers are already shopping extensively online and have come to expect digital retail sales, he said. Tonight, 1 in 10 entrees served in Americans' homes will be a "prepared, ready-to-eat" item purchased outside the home.

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