Amazon moves into real-world stores with $13.7 billion Whole Foods deal

Amazon to buy Whole Foods Market in deal valued at $13.7 billion

Amazon will be able to use automation and data analysis to draw more customers to stores while helping Whole Foods cut costs - and perhaps prices - and better tailor its offerings to customers.

Instacart is the on-demand delivery startup that promises grocery deliveries in as little as one hour.

Acquiring Whole Foods will provide Amazon more physical locations to experiment with, and eventually expand its retail business.

While their merger is subject to approval by Whole Foods' shareholders, regulatory approvals and other customary closing conditions, the two parties expect to close the deal during the second half of 2017.

"It's convenience, right? We all live a busy, hectic life", Bradford said. At the time, Whole Foods called Instacart its largest partner for online ordering and delivery.

But a person close to Instacart told Bloomberg that the startup thinks it can still hang on to its Whole Foods partnership. How?

Expanding into the grocery market would not only bring profits to Amazon but a room for great expansion.

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

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The deal further shows Amazon's willingness to take on Bricks and Mortar (B&M) outlets.

Set up in 1978, Whole Foods, whose stores now span more than 430 locations, has found it hard to attract more mainstream consumers as Walmart and other large chains have stepped up their sales of natural and organic products. So, no - you won't be greeted by robots when you go inside a Whole Foods outlet. It reportedly makes up less than 10% of Instacart's revenue, still a substantial sum.

About 450: Number of Whole Foods stores across the country. That fits with Whole Foods private-label push to compete on price, and gives Amazon a bigger foundation on which to develop its own food brands.

Giant Eagle, which has three stores in Portage County, declined to comment, and Kroger did not respond to requests for comment.

Hrach Simonian, an investor in Instacart and general partner at Canaan Partners, stressed that Instacart has many other partners. It also means big changes are ahead for the grocery business. The break-up fee was set at $400 million. That includes major chains like Costco, Supervalu and Wegmens, which was just announced this week.

"We believe AMZN can work to transform the physical retail experience". "More customers are concerned about price and value, and that has a material impact on profitability".

While that's good news for consumers, it could pose a challenge for Cincinnati-based Kroger as they try to attract new customers.

Amazon's shares were up 3% at $994.45. It announced Friday that it's buying online men's clothing retailer Bonobos for $310 million, following a string of online acquisitions including ModCloth and Moosejaw.

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