Amazon acquisition spree: Is Jeff Bezos eyeing media companies?

Amazon — headed by Jeff Bezos — ‘has the ability to put the fear of God in any competitor

The merger signals Amazon's intention to expand its Amazon Fresh grocery operation from a mostly online business to something that could include in-store pick-up at Whole Foods' more than 460 locations in the U.S., Canada and the U.K. In Seattle, Amazon recently opened two of its own drive-through grocery pickup locations for Amazon Fresh customers.

Bezos' tweet was sent less than 24 hours before Amazon announced Friday morning that it was buying Whole Foods in a deal valued around $13.7 billion.

The online retailer launched a grocery delivery and pickup service, AmazonFresh, in the USA about a decade ago and started selling non-perishable food items to Canadians in 2013. And shoppers may be skittish about having Amazon take over one more element of their shopping experience.

Some industry observers say Amazon will find it hard to use Whole Foods to pull away Wal-Mart shoppers because the two stores appeal to different customers.But Michelle Grant, head of retailing at market research firm Euromonitor, said Amazon could use an obscure part of the Whole Foods portfolio - Whole Foods 365 - to lure Wal-Mart shoppers.Whole Foods 365 offers private-label goods and lower prices than typical Whole Foods stores, and is targeted at younger, value-conscious shoppers.

Walmart, which has the largest share of the USA food market, has already been pushing harder into e-commerce to build on strength in its stores and groceries. "Most of us like to see what we're buying, and it's a good store, but we just wouldn't buy online", he said.

Amazon and Whole Foods weren't always seen as obvious partners, but Mackey has been under pressure to find an acquirer after Jana disclosed a more than 8 percent stake and began pushing for a buyout. But the question itself is the wrong way to look at Amazon's impact on grocery workers.

Amazon did not elaborate on the strategic rationale for buying a grocery chain, but analysts said the acquisition has the potential to strengthen its ties to consumers through its Prime program.

Shares of Byron Center-based grocery retailer and distributor SpartanNash Co. Mergermarket's Lim says the first challenge for Amazon is how to successfully run a physical supermarket chain. The takeover is slated to be completed in the second half of the year, with Whole Foods' headquarters remaining in Austin, Texas.

According to Mergermarket, the bid is not only one of the decade's top grocery deal in the United States, but is also the fourth largest USA deal in the retail subsector.

Peter Belanger of Newington, Connecticut, who was shopping at a Whole Foods in West Hartford, said he didn't think he'd be interested in groceries online.

And shoppers are a picky bunch, saying they would be looking for the best prices, good quality and convenience when it comes to online food delivery. The 35-year-old Army aviator, who's stationed at nearby Hunter Army Airfield, said for non-persishable items - and for other products when she's busy - she relies on the mobile app Shipt, which for $100 per year allows her to schedule home delivery of groceries from the local Publix.

Prime membership growth isn't showing any signs of slowing down. "Whole Foods is expensive enough".

There's also the "grocerant" trend - a blending of grocery stores and restaurants.

Since 2002, Amazon has used a pioneering approach that makes its technology infrastructure not simply a powerful back-end, but perhaps the most impressive computing platform in the industry today.

"The thinking is it's a very complex area that everybody's been testing and trying to make something work, but they haven't been able to figure it out and that Amazon, now they're here, they can make it work", Agnese said.

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