CLEVELAND, June 16, 2017 /PRNewswire/ -- Today, Amazon.com, Inc. announced its agreement to acquire Whole Foods Market, a deal valued at more than $13 billion. The transaction is expected in the 2nd half of 2017.
The strategic possibilities that stem from the acquisition abound. While online grocery sales have grown nearly fivefold in the US over the last decade, they still account for less than 1% of overall sales. Groceries remain one of the underrealized segments of e-commerce, especially when compared to consumer electronics and media sales.
Analyst Mike Richardson discusses the acquisition: "With Whole Foods as part of the broader Amazon footprint, they're into the grocery segment in a big way. If online grocery shopping becomes more mainstream, it's hard to imagine that Amazon won't be out in front of that wave. And if it doesn't, Whole Foods is a good vehicle through which to compete in the brick and mortar grocery world -- Whole Foods' shoppers are generally younger and more affluent than the typical shopper. Amazon's expertise in e-commerce will combine with Whole Foods' reputation for quality grocery items, which will put the combined business in a good position to compete in a more robust online grocery segment, a more traditional store-bound grocery industry, or -- perhaps most likely -- something in-between. Amazon has already experimented with physical retail, including food, incorporating some of the technological innovations of its e-commerce activities."
The acquisition of Whole Foods could reshape Amazon's competitive position in both traditional retail and e-commerce, and will almost certainly have a significant impact on the US retail landscape, and -- less directly -- other industries, such as packaging and logistics. The Freedonia Group and MarketResearch.com have numerous reports related to food retailing and e-commerce, including on a number of packaging topics.
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SOURCE The Freedonia Group