Amazon are set to make their biggest push into traditional retailing yet through a deal to buy Whole Foods worth over $13 billion.
The global online giants will acquire the organic grocery chain in a huge move set to shake up the grocery retail category. The deal is set to be completed later in the year.
Whole Foods have been at the forefront of the industry move towards natural and organic products, since their inception in 1978, and this deal shows the confidence in this growing market.
Whole Foods chief executive, John Mackey, who is expected to remain in his position, said of the new deal: “This partnership presents an opportunity to maximize value for Whole Foods Market’s shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers.”
Jeff Bezos, Amazon founder and chief executive, commented: “Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy. Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades – they’re doing an amazing job and we want that to continue.”
Neil Saunders, GlobalData Retail managing director, spoke about the “inherent logic in the move which brings benefits to both businesses,” whilst admitting that, “although Amazon has been a looming threat to the grocery industry, the shadow it has cast has been pale and distant — today that changed.”
In his view, the deal could make Whole Foods more competitive online and improve its supply chain logistics whilst proving “potentially terrifying” for rivals.