The $13.4 billion instantly grants the American electronic commerce company hundreds of physical outposts in neighborhoods across the United States. The acquisition comes as Amazon wanted a bigger piece of the $800 billion/year grocery business.
Whole Foods shares traded back in October 2013 as high as $65 per unit. Since then the price fell to under $30 (as reported earlier this year). In an effort to combat declining sales, the company tried to push important changes in its on-line strategy. Market experts say that these changes also came as a result of high pressure from activist investor Jana Partners (which had built a 9% stake in the company as it was revealed in an April report).
(Amazon Fresh, the company's grocery delivery and pickup service until now: Amazon Fresh delivery vans parked at an Amazon Fresh warehouse)
The announcement for the recent acquisition shook the grocery business world. Kroger shares(KR), which dropped 18% on Thursday following disappointing first quarter results, dropped another 14% after Amazon's acquisition. American multinational retailing corporation Walmart is just one of the many companies that feels threatened. Walmart's supply chain and strategy consultant declared the following:
"Make no mistake, Walmart under no circumstances can lose the grocery wars to Amazon.. If Walmart loses the grocery battle to Amazon, they have no chance of ever dethroning Amazon as the largest e-commerce player in the world".