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Geographic analysis: Amazon and Whole Foods footprints are remarkably similar

22 June 2017

NEW YORK (AP) — Whole Foods CEO John Mackey says the deal to be acquired by Amazon was the result of a "whirlwind courtship".

"And she said, 'That's insane, '" John Mackey said at a town hall meeting on Friday, after Amazon announced it was buying Whole Foods for $13.7 billion.

Mackey explained that he and his top execs first "flew up to Seattle" to talk with Amazon about a possible merger a little over six weeks ago. But any price for Whole Foods stock that is higher than Amazon's offer could be a sign that Wall Street thinks another company could swoop in with an even better deal. Jeff Bezos might demand a man cave, in other words, but it "wouldn't be branded Whole Foods Market", he assured his employees, and will definitely occupy the basement level underneath the garage.

It's also not clear if Amazon will sell the technology to other companies - for the sake of being able to profit off this vertical when the competition's already sealed off from its customers anyways.

However, this deal with Whole Foods marks Amazon laying down the gauntlet and proving just how serious it is about its grocery business.

Many grocery stores, including Hannaford and Whole Foods, offer online ordering with in-store pick-up. "If there ever was a time crunch, I'd consider it", he said. "They will push pretty heavily to integrate Whole Foods with Amazon, I'm sure there'll be Prime rewards for shopping at Whole Foods", Barnett says". "And I think it would be insane to change them", said Jeff Wilke, chief executive of world-wide consumer at Amazon, at the Whole Foods town hall.

Amazon has "had the courage.to resist the drumbeat of short-term, quarterly earnings that have had us trapped here for a couple of years, as our same-store sales came down", he said.

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Amazon is known for taking the long view.

Giammona says there is some concern among "hard-core Whole Foods fans" that Amazon could change the grocery's image and product options. This is not- this is not a Tinder relationship.

Experts note that most Whole Foods shoppers are already familiar with Amazon and are lining up for what could be a smooth transition.

Aaron Turner, a Los Angeles-based analyst who covers Grubhub for Wedbush Securities, wrote in a note to clients Monday that the tech giant's plans to buy Whole Foods for almost $14 billion set it up for a larger food ordering and delivery play.

Whole Foods' physical locations are viewed as vital to Amazon's push for a larger share of online food sales.

Whole Foods used to be one of the leaders in organic and natural foods, but other chains have increased the availability of those products.

One change coming after the Whole Foods deal closes, says Citigroup, will involve private label offerings.