Amazon Charts Future of Food Shopping with Whole Foods Deal

The deal now gives Amazon control of those 431 stores, almost all of which are in neighborhoods that are more affluent and younger than America as a whole.

Whole Foods Market's share price rose more than 29% on Friday.

Amazon, meanwhile, will be able to use hundreds of Whole Foods stores as distribution hubs - not just for delivering groceries but as pickup centers for what customers order online. However, there were a few big winners in the deal.

Whole Foods CEO, John Mackey, had been feuding with the activist investor over the prospects of a sale.

In a recent interview with Texas Monthly, Mackey called the investors "greedy bastards". He also accused the fund of trying to destroy his and his company's reputation. "This deal has dramatically flipped the table on traditional companies". Among Jana's other high-profile holdings are Tiffany, where it has gained board seats, ConAgra Foods, and Sherwin Williams. This is by far the largest acquisition Amazon has ever made.

Whole Foods, founded in 1978, saw its stock peak in 2013 at $65.24. You point out that 24 percent of millennials bought something from Whole Foods a year ago. Amazon's warehouses, on the other hand, do use these robots to keep things moving.

But if Amazon can be the one-stop shop for everything — groceries had been one of the key missing elements — customers would have even less of a need to go to Walmart or elsewhere. That should benefit Whole Foods as it tries to return to sales growth.

Cooper Smith, head of Amazon research at L2, said it's likely that Instacart will be the loser in Friday's deal.

"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. Last year, it dispatched senior bankers to several North American cities where big companies are based, including Atlanta, Toronto and Seattle.

At least for the time being, Whole Foods' retail stores will continue to operate under the same brand name, there won't be any immediately noticeable differences for shoppers, and there are no plans to lay off Whole Foods workers, either. While both companies aren't headquartered here - check out Austin Inno for the deal's impact on Whole Foods' home base - the deal is certainly going to have an impact here and everywhere else across the country, if only due to their collective reach.

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen.

"I think we will be a bell-weather for what will happen around the country", said Ed Fox, marketing professor at the Southern Methodist University Cox School of Business.

Adrienne Anderson, at a Whole Foods in Savannah, Georgia, says she shops at Whole Foods nearly exclusively for meat and fresh produce "because of the quality and selection" and because fruits and vegetables are locally sourced.

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