Amazon is acquiring Whole Foods, a move that marks the the ecommerce giant’s official entry into the world of brick-and-mortar stores as well as groceries.
Amazon’s paying $13.7 billion for the grocery chain, which now operates some 465 stores across the U.S.
Starting out as a online book seller, Amazon has grown into a retail behemoth, drastically altering the market for almost every company in the U.S. that sells consumer goods.
Not content to just dominate ecommerce, Amazon has been tip-toeing into the real world with some bookstores and experimental convenience stores.
Those efforts led to speculation that Amazon eventually would make a major acquisition of a chain, rather than slowly build out its own stores.
That acquisition ended up being Whole Foods.
Amazon did not just buy Whole Foods grocery stores. It bought 431 upper-income, prime-location distribution nodes for everything it does.
— Dennis K. Berman (@dkberman) June 16, 2017
The Texas-based grocery chain has grown quickly in the past couple decades, building its brand around healthy and organic offerings that are locally sourced.
“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 Jeff Bezos, Amazon founder and CEO, in a press release. “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.”
It’s unclear exactly how much Amazon will change Whole Foods or integrate it into its existing business, though the companies noted in a press release that the brand would continue to operate and use its existing vendors.
“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,” said John Mackey, Whole Foods Market co-founder and CEO.
Whether Whole Foods will remain to just do Whole Foods thing is a whole other question. Amazon could use its locations for a variety of offerings—particularly the expansion of its super-fast delivery program.
Whole Foods is generally targeted at high-income people, with its stores strategically located in affluent areas. Now, Amazon has bought its way into that market with one fell swoop.
I, too, spend $13.7 billion at Whole Foods.
— Slade Sohmer (@Slade) June 16, 2017
This story is developing.