On June 16, Amazon announced the purchase of Whole Foods Market, a chain of organic food stores, for about $13.7 billion. Amazon has spent over $13 billion to buy Whole Foods it owns.
Why
The Whole Foods
/ Amazon Deal
Was An Historical Event
.
Amazon's entry into the food market will increase the pressure on traditional supermarkets around the world, which have been affected by the shift of shoppers to online, small local stores and discount stores such as Aldi and Lidl. The purchase shows Amazon's interest in operating traditional brick-and-mortar stores, although many retailers who have been paralyzed by Amazon's growth have announced a number of store closures.
When Amazon agreeded to buy luxury grocery chain Whole Foods for $13.4 billion in a deal that will instantly transform the online shopping pioneer into a retailer with physical outposts in hundreds of locations across the country. When Amazon stepped in unexpectedly with its purchase of Whole Foods Market, some industry insiders saw the acquisition as a way for Amazon to acquire a host of physical properties (over 480 stores) that some analysts believe will be important to Amazon. . scale Amazon's food ambitions or even distribution goals. Brian Roberts, an analyst at TCC Global, said Take suggests Amazon could now try to buy supermarket chains in its core markets, including the UK, France and Germany.
What The Amazon / Whole Foods Meant For Markets
Conventional grocery chains such as Safeway and Kroger, with their larger scale and often greater efficiency, offered organic products at lower prices in stores that were literally around the corner from consumers across the country. A former Amazon grocer expert predicted that the chain, dubbed "Whole Paycheck", will add a range of discounted groceries and create non-food zones in stores, especially for pharmacies and Amazon devices.
The massive expansion of Amazon Fresh stores may be a traditional grocery chain game, but it's also a way to set up food warehouses in every neighborhood, ready to fulfill online food orders that people place through their Amazon accounts, of course. A huge national chain of Amazon Fresh stores may not even be Amazon's ultimate goal. The new Amazon Fresh Stores might just be a Trojan horse for Amazon's real purpose, which is same-day grocery delivery to everyone, everywhere.
As a result of all this, manufacturers around the world will be under greater political and competitive pressure to increase their domestic production, increase employment in their countries, reduce or even eliminate their dependence on sources that are considered risky, and rethink their use of lean manufacturing strategies that include minimizing the amount of inventory held in their global supply chains. Ultimately, these disruptions in the supply of materials will prolong shortages of many products, creating the perfect storm for rising inflation. As such, several sectors are likely to experience both undersupply and oversupply issues throughout the year.
Is Amazon Becoming To Powerful
?
Amazon is making big bets on the brick-and-mortar and grocery business. The company has its own AmazonFresh delivery service and is experimenting with a "click and collect" model that allows customers to buy groceries online and then pick them up in person. Amazon brought its food delivery service to the UK after it signed a wholesale deal with British supermarket Morrisons last year.
Some stores advertise special discounts for Amazon Prime members. More than 100 Whole Foods stores will be showcasing new Amazon Echo, Echo Dot, Fire TV, Kindle and Fire tablets ahead of the holidays, and in select markets, Amazon will also open pop-ups at Whole Foods stores where shoppers can learn about the devices Plus Prime Video and other loyalty benefits. Additionally, Amazon and the Whole Foods Market tech team will begin integrating Amazon Prime into the Whole Foods Market point-of-sale system, and when this is done, Prime members will receive special discounts and in-store benefits.
The downside is just the beginning: Whole Foods Market will make Amazon Prime a Whole Foods Market customer rewards program, and will keep dropping prices as the two companies co-invent. The decline is just the beginning: Amazon and Whole Foods Market aim to offer shoppers more in-store perks and lower prices as the two companies integrate logistics, point-of-sale and sales systems. Boost your Prime loyalty program by offering Prime members discounts on Whole Foods purchases, a 5% refund on all Whole Foods purchases made with an Amazon-branded Visa card, and raising awareness of the Prime program.
We Handle Every Single Aspect
Contact Us Today for Your
Free 6 Month
Marketing Plan