Amazon to Purchase Whole Foods in $13.4 Billion Deal

Friday, Amazon announced that it would be buying Whole Foods for $13.4 billion as the company and its billionaire head look to expand into the brick-and-mortar realm.

This is yet another monstrous push by Amazon into the grocery industry, an industry that the New York Times notes accounts for just around $700 to $800 billion in yearly sales. Amazon, of course, is one-upping their major competitor in the field, Walmart, thanks to their having been born on the Internet and not having to play catch up like Walmart is.

The New York Times reports (don’t worry, there’s no strange bias here since Bezos is one of their own):

For Whole Foods, the deal represents a chance to fend off pressure from activist investors frustrated by a sluggish stock price. Whole Foods last month unveiled a sweeping overhaul of its board, replacing five directors, naming a new chairwoman and bringing in a new chief financial officer. It also laid out plans to improve operations and cut costs.

With Amazon, Whole Foods gets a deep-pocketed owner with significant technological expertise and a willingness to invest aggressively in a quest for dominance.

Amazon has designs on expanding beyond online retail into physical stores. The company is slowly building a fleet of outlets, and much attention has been focused on its supermaket dreams. It has already made an initial push through AmazonFresh, its grocery delivery service.

The e-commerce giant has been testing a variety of other retail concepts. It has opened a convenience store that does not need cashiers, and has explored another grocery store concept that could serve walk-in customers and act as a hub for home deliveries.


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