amazon shakes up the grocery business with its $13.7-billion deal to buy whole foods - online drawing board

Amazon has revolutionized the sales of books, electronics and other products.
The online shopping giant is now threatening to change the way people buy food. Amazon. com Inc.
Dropped a blockbuster in the United States on Friday. S.
By agreeing to buy Whole Foods Market Company, grocery industryfor $13.
7 billion, including net debt. The 465-
Helped create a large chain store
Large-scale sales of natural and organic foods, usually at a higher price, appear to be a niche market for $611 --billion U. S. grocery world.
But the likely ripple effect of Amazon's biggest ever acquisition has immediately upset the industry, causing supermarket companies' stocks to plummet.
Because Seattle-
Amazon has been actively using lower prices, technology and a vast network of distribution centers to transform other retail industries.
Analysts say that in fact, Whole Foods will be the springboard for Amazon to make waves across the grocery industry, which may benefit consumers.
First of all, Amazon may put more pressure on competitors to lower their prices, at which point the grocery store has been squeezed by price pressure and can only earn a penny or two for every dollar sold.
"Amazon will take a virtual sledgehammer on the pricing structure of the entire food," Bankrate said . ".
Mark Hamrick, senior economic analyst, said.
"It was an earthquake in the grocery industry.
"Whole Foods will retain its name under the transaction, which is subject to shareholder and regulatory approval and is expected to be completed in the second half of this year.
The company will also maintain its Austin headquarters and John McKee will continue to be chief executive of the entire food company.
Matt Conrod, a 21-year-old shopper, said he hoped the sale would not result in a change in the inventory of the Whole Foods supermarket in downtown Los Angeles --
Especially the vegetarian donuts he likes because of allergies.
"But if Amazon had a choice, I wouldn't mind ordering my vegan donuts online and flying them to me via drone," he said . ".
The drone may not be on the drawings at the moment, but Whole Foods can allow Amazon to take advantage of the technology it is developing to deliver more grocery delivery, a more seamless checkout experience, and stronger customer contact
The ins between its online presence and its bricks-and-
Mortar grocery store
"They look long --
Find ways to build additional touch points with customers using the entire food footprint and serve as a platform for some of their new technologies (such as self)
"Checkout," said Steven Weinstein, general manager of research firm M Science.
All of this is why investors immediately sold shares in other major supermarket chains after announcing that Amazon would pay $42 a share for Whole Foods. (
Amazon will pay $13.
4 billion of the shares, and some of the total food debt, the total value of the transaction reached $13. 7 billion. )
Shares of Roger co wholesale company Kroger fell 9%.
Down 7%, farmers market Ltd. lost 6%.
The industry has been highly integrated and some companies hold large shares in the supermarket business.
Analysts say lower share prices may allow the companies to be ripe for an offer.
Whole-food stocks jumped 29% to $42.
68, Amazon got 2. 4% to $987. 71 a share.
In fact, Amazon is so big now that investors are basically buying Whole Foods for free --
At least one day.
Amazon shares rose $11 on Friday.
3 billion of the company's overall stock-
The market value was $475 billion.
Amazon absorbed Whole Foods while grocery dealers struggled, largely because traditional supermarket chains have been storing more natural products for their aisles --
Usually lower than Whole Foods.
Andrea Tarasov, 21, Hollywood, loves Whole Foods
For example, its cucumber juice
Its nature
But they think the price is often too high.
"It would be great if Amazon could change unreasonable prices," he said . ".
Sales growth and share prices for the entire food sector have declined.
Before Friday, the company's share price fell more than 40% from its 2013 high --
Radical investors, including Jana Partners, have been pressing for a sale or other change.
The price of whole foods is relatively high
This chain is sometimes called "full pay "--
For millennials between the ages of 18 and 34, this is seen as particularly heavy work, and the company has responded by planning to open smaller, lower-priced companies
The Whole Foods store, which includes six locations in Southern California, has a total of 365.
Colin Walsh, CEO of mobile device Varo money, said: "Everyone has to manage their money, everyone has to buy toilet paper, and now everyone wants to eat organic foodBanking services.
"Whole Foods, along with Amazon, will make all of this seamless, what millennials expect.
The merger announcement did not mention the fundamental changes that could happen, and Amazon CEO Jeff Bezos simply said that Whole Foods "did a fantastic job and we hope this will continue.
"According to Shelby, who tracks the industry, Whole Foods has 85 stores in California, and its share of the competitive Southern California market is only 3%.
There are also Albertsons and Kroger Co with Vons and Pavilions.
The size of the Ralphs chain is much larger, with a market share of nearly 40%.
According to FactSet Research Systems Inc. , Amazon has made nearly 80 acquisitions since it was publicly launched in 1997.
Including moviesand-
IMDB, a television information provider, is Audibile and footwear retailer, an audiobook service company.
Amazon's sales last year totaled $136 billion, including product sales and a variety of video, entertainment and other services offered through its key members, at $99 a year.
Prime also offers free shipping for Amazon shopping, with more than 65 million Amazon customers subscribing to Prime, analysts estimate. (
Amazon did not disclose the figure itself. )
On Friday, there was widespread speculation that Amazon might find ways to combine its main membership with whole-food shopping.
More and more traditional supermarkets have increased their personal
Label items because they are cheaper than national brands
Product Name and profit margin.
But that could change as Amazon joins, says Mike Sands, CEO of Signal, a marketing technology company.
"I think this will bring traditional grocery stores closer to working with major packaged foods --
Sands said commodity companies will share data and marketing plans around the needs of consumers.
"If I were Kraft foods or Kroger, I would ask, 'What can I do to work together in the marketplace, including Amazon?
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: Additional analysis was updated in this article. 11:10 a. m.
: This article has been updated to include comments from whole food shopper Matt connold. 9:55 a. m.
: This article was updated to include the background of Amazon's acquisition history. 8:40 a. m.
: This article was updated to include comments from bank rate.
Mark hamrik, senior economic analyst8:10 a. m.
: The article was updated, including comments by Paul Cuatrecasas, chief executive of Aquaa Partners, the company's financial consulting firm. 7:50 a. m.
: The article was updated to include comments from Ron Johnston of the grocery industry publication Shelby Report. 7 a. m.
: This article is constantly updated with reports from time staff.
The article was originally published at 6: 15. m.