Amazon Said to Plan Cuts to Shed Whole Foods' Pricey Image

Author

20 June, 2017

The $13.7 billion deal brings to a head a years-long battle brewing between Amazon, the online darling, and traditional retail powerhouses likes Walmart.

The Seattle-based company already offers discounted Amazon Prime memberships for people receiving government assistance and is part of a pilot program to deliver groceries to food-stamp recipients.

The announcement of Amazon's largest acquisition yet sent stock prices for major grocery chains tanking Friday morning.

Moody's lead retail analyst Charlie O'Shea said the deal could be "transformative, not just for food retail, but for retail in general". 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. She feared the merger would simply create another, huge company with too much power over the American consumer.

Now Amazon will take on grocers like Wal-Mart and Kroger.

"If you can't make a good margin you can't reinvest to make a better product", Motkin said. "It's a bit unsettling". However, Whole Foods has only 431 stores against an estimated national total of over 38,441 grocery store locations.

Hartmann said he expects the online retailer to introduce some efficiencies to Whole Foods' operation. "I'm aging, and I was in there and I was surprised how many people were bent over with age".

How to Make $80000 per Month on the Apple App Store
The principal concern that Lin is raising relates to the approval process which Apple users before Apps make it into the store. It's baffling that Apple approved apps like this in the first place - perhaps it's a side effect of faster app review times.

E3 2017: Xbox One Getting Cross-Play With Nintendo Switch For Minecraft
Now, Sony in a recent interview has tried their best to justify as to why they don't want cross platform play on their console. Update, June 12 at 11:45 a.m.: Adds details about graphics changes coming to Minecraft in the fall.

Dennis Rodman, personal friend of Trump's, is heading back to North Korea
But he grabbed just as much attention off the court for his piercings, brightly-dyed hair and headline-grabbing antics. Speaking in 2014, he said: "It's about trying to bridge a gap to a country that people say is so bad".

June 16 A decision by Goldman Sachs Group Inc a year ago 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.

When Amazon approached, Whole Foods turned again to Evercore.

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. Backed by its express delivery network, it has entered the USA grocery market with limited success through its online platform in recent years under a brand name known as AmazonFresh. "I think Amazon is very purposeful about taking the companies that they acquire and preserving the things that made those companies great and I think in the case of Whole Foods, it's a lot of the same values that are true to Austin and I think if anything you might start to see more Austin kind of show up in how Amazon does business in the world". He added that these are likely the higher-income households who tend to buy more expensive brands and cuts of meat.

The merger of Whole Foods and Amazon is expected to close later in 2017 after gaining approval from USA regulators and Whole Foods' stockholders.

Whole Foods has posted seven straight quarterly sales declines at established stores and recently overhauled its board of directors in the face of pressure from activist hedge fund Jana Partners LLC.

Amazon already offers grocery-delivery services in five markets, but analysts say expansion is tough because its current distribution centers are set up for dried goods, not perishables. The company, however, has faced fierce competition from neighboring retail chains, particularly Costco, Safeway, and Walmart.


More news


  • Britain, EU to begin Brexit negotiations on Monday

    The first round of formal negotiations on Britain's withdrawal from the European Union will begin on June 19, it has been confirmed.

    Escaped Georgia Inmates Captured

    Law enforcement officials said Dubose and Rowe performed a home invasion of an elderly couple in Bedford County around 2 p.m. Authorities later spotted the stolen vehicle on Interstate 24 and tried to stop them near the Epps Mill Road exit.
    Roger Federer beaten by 39-year-old Tommy Haas on Stuttgart return

    Roger Federer beaten by 39-year-old Tommy Haas on Stuttgart return

    It was an incredible win for Haas - once world No 2 but now ranked down at 302 - who triumphed in the first round in Stuttgart . The Swiss superstar followed the expected script in the opening set, sweeping to a 6-2 advantage as he glided across the grass.
  • Tropical Storm Calvin lashes tourist spots in south Mexico

    Tropical Storm Calvin lashes tourist spots in south Mexico

    Some strengthening is possible and the depression could become Tropical Storm Calvin before it slides inland. National Hurricane Center said Calvin was making landfall on the coast of Oaxaca state.
    Did Lonzo Ball prove himself to the Los Angeles Lakers?

    Did Lonzo Ball prove himself to the Los Angeles Lakers?

    As you can see in the highlight video below, he is an explosive athlete who can consistently make plays above the rim. Here is the latest in our series on draft prospects projected to be picked around where the Wizards will select.
    Kane reflects on 'special' goal after England rescue job

    Kane reflects on 'special' goal after England rescue job

    In the marines, they are life and death situations and we took as much as we could from the game and stood up to be counted. We have to be a team that are never beaten, maybe the clock runs out but you never, ever stop and today we have done that.
  • Thomas shoots 63, trails Harman by 1 at US Open

    The lead, however, belonged to Harman , who closed with two birdies and three tough pars. "I've got a good plan for this course ". The course had been softened by rain earlier in the week, and it finally played the way the USGA wanted in the final round.

    Doctor says Otto Warmbier has brain damage

    USA doctors said they found no evidence of active botulism, a rare, serious illness caused by contaminated food or a dirty wound. White calls him a "curious boy" and says his adventurous nature led him to travel extensively during summers.
    Former Michigan Legislature aide among Virginia shooting victims

    Former Michigan Legislature aide among Virginia shooting victims

    Three Michigan congressman, including Bishop, were all present at the baseball practice when the shooting erupted. The Republican congressional baseball team was practicing on a suburban Virginia field Wednesday when James T.
  • White House says no determination yet on 'Dreamer' immigrants

    Some civil rights groups criticized the timing of Kelly's announcement, which coincided with the anniversary of Plyler v. It was revoked five years to the day after President Barack Obama announced the protection efforts for young immigrants.
    New meets old in Mario & Luigi Superstar Saga + Bowser's Minions

    New meets old in Mario & Luigi Superstar Saga + Bowser's Minions

    Superstar Saga spawned a series of sequels: Partners in Time, Bowser's Inside Story, Luigi's Dream Team , and Paper Jam . The mode was described as "a storm of activity" with deep strategic elements and skills to master.
    Justices Strike Down Gender Differences in Citizenship Law

    Justices Strike Down Gender Differences in Citizenship Law

    In the interim. [the] now-five-year requirement [that applies generally] should apply, prospectively, to children born to unwed U. He was convicted of several criminal offenses in 1995, including two counts of robbery and four counts of attempted murder.