Posted on: 14 August 2017 By: Ray

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The largest pioneering US organic and natural grocery retailer, Wholefoods agreed to merge with online sales giant Amazon, in a statement released last June. The deal will be closed in the 2nd half of the year, the statement read.

In its largest acquisition deal ever worth $13.7 billion, Amazon takes over the 450 Wholefoods locations in 42 US states, according to Entrepreneur.

Analysts say this will radically change the way Americans buy and receive food.

Bleak prospect revitalized

The retail grocery sector had been struggling in the US, and Wholefoods itself had seen its sales decline lately. The acquisition announcement further hit the sectors’ giants’ share prices (WalMart, Costco, Target etc.), while Wholefoods’ soared 27 percent at the news.

However, “Online grocery shopping could grow five-fold over the next decade, with American consumers spending upwards of $100 billion on food-at-home items by 2025” according to a report from Food Marketing Institute and Nielsen in January this year.

A new disruption?

The alliance of the successful massive online retail sale enterprise and the pioneering physical outlet (“brick-and-mortar”) supermarket chain indeed augurs some exciting developments in the US market. However, the “disruption” worries the US retail grocery sector and excites competitors in the on-line retail sales industry.

Joel Barbier and Hiten Sethi write in Entrepreneur on August 9 :  “Instacart, Uber EATS and Google Shopping Express are all disruptive players in the market that could pose a competitive threat if they establish leadership in this segment before Amazon does.”

In a recent development, Reuters reports (14 August) “German grocery chain Aldi Inc [ALDIEI.UL] said on Sunday it has partnered with Instacart Inc to deliver groceries in three U.S. cities, a move that comes amid intense competition and disruption in the industry.”

 Will it spread to Europe?

Wholefoods has a tentative presence in Europe with a high-end store opened in London, while Amazon is already well-established all over the continent.

Will this new “disruption” spread to Europe? What do you think?

 

Find out more :

Wholeffods press release June 16 : http://media.wholefoodsmarket.com/news/amazon-to-acquire-whole-foods-market

“Amazon’s Ambitions for Food Tech Go Well Beyond Whole Foods” Fortune&

Reuters, Aug 11, 2017 http://fortune.com/2017/08/11/amazon-whole-foods-home-meals/

https://www.entrepreneur.com/article/298464

Reuters  August 14, “Aldi enters grocery delivery in partnership with Instacart“


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