Published: Mon, June 19, 2017
Economy | By Annette Adams

Can Amazon persuade enough people to buy fresh food online?

Can Amazon persuade enough people to buy fresh food online?

When Wal-Mart Stores Inc bought online retailer Jet.com for $3 billion last year, it marked a crucial moment - the world's largest brick-and-mortar retailer, after years of ceding e-commerce leadership to arch rival Amazon, meant to compete.

- Elemental Technologies, $296 million, video processing technology, transaction date 2015.

Whole Foods Market ended trading Friday up $9.62, or 29.1 percent, to $42.98. And while the deal sent a number of food-related retailers lower, I see Costco Wholesale Corporation (NASDAQ:COST) as the biggest potential victim.

The acquisition, which has not yet received approval from the shareholders of Whole Foods Market, adds a 27% premium to Thursday's closing value of its stock.

Amazon is expected to thoroughly transform Whole Foods Stores, expanding them beyond being grocery stores to integrate them into their broader operations, perhaps including technology retail, and online-purchase ability.

Whole Foods and Amazon share some of the same demographic trends, according to data from the NPD Group.

"The quality will give to provide a cheaper price to consumers", said Whole Foods Shopper Hamid Fhehollahi. Whole Foods already has a lot of in-store dining and lots of prepared foods.

The deal proves Amazon's increasing interest in moving into operating traditional brick-and-mortar stores and its growing focus on groceries.

"It's too soon to say if we would reconsider or change anything" about the relationship with Amazon Prime Now, Hardy said.

Amazon has been looking at shop layouts that could allow traditional in-store purchase, online ordering with on-site pickup, and home delivery, using store warehouse space as a distribution point, Ladd said.

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

Amazon said that it won't change the Whole Foods Market brand and stores will continue to operate under the same brand name. Amazon was up $23.54, or 2.4 percent, to $987.71.

June 16 A decision by Goldman Sachs Group Inc previous year to move an investment banking veteran to Seattle, as well as Evercore Partners Inc's hiring of a top banker defending companies against activist investors, has paid off handsomely.

Can Amazon, the company that persuaded people to buy ever more items online, win enough of them over to having their fresh groceries arrive in an Amazon box? Whole Foods has seen its sales slump and recently announced a board shake-up and cost-cutting plan amid pressure from activist investor Jana Partners. The acquisition price implies a trailing 12-month price-to-earnings multiple for Whole Foods of 31 times, versus a 14.4 average for the S&P 500 Food Retail index. Wal-Mart, which has the largest share of the USA food market, has been working on lowering prices, while Target has been struggling to turn around its grocery business.

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