Amazon buying Whole Foods in $13.7 billion deal; grocery stocks tumble

Supermarkets and grocery stores had also plunged Thursday after Kroger cut its annual forecast.

The relationship between Instacart and Whole Foods dates back to 2014 but deepened in 2016, when they announced a new five year deal.

Customers drive past this Whole Foods Market store in Jackson, Miss., Friday, June 16, 2017.

Whole Foods recently had come under pressure from activist hedge fund Jana Partners LLC, prompting it to overhaul its board.

Whole Foods Market is a leading natural and organic foods supermarket and the first national "certified organic" grocer. "I'm shopping here anyways", shopper Alina Gura said at a Whole Foods in West Hartford, Connecticut. They primarily want us to sell the company.

Investors worry that Amazon, which has already won over hordes of shoppers of clothing, electronics and many other kinds of goods, wreaking havoc on department stores and other brick-and-mortar retailers, will do the same thing with groceries.

Peter Belanger of Newington calls himself an "Amazon person" who uses two Kindles, but said he and his wife will not likely shop the internet for food.

"It's too soon to say if we would reconsider or change anything" about the relationship with Amazon Prime Now, Hardy said.

These early forays into groceries provide clues for what consumers could expect from a combined Amazon and Whole Foods, a deal expected to close later this year. Anderson advised Whole Foods alongside senior Evercore bankers Eduardo Mestre and William Hiltz. Those stores would solve much of Amazon's "last-mile" delivery challenge for fresh groceries - perhaps the top reason it hasn't made a dent in the grocery shopping of the 60 percent of millennials who buy other items from Amazon, he said.

Amazon is buying Whole Foods Market for $13.7 billion. Whole Foods will keep operating stores under its name. Based on his forecasts, Amazon will likely rank as the ninth largest US grocery retailer this year - though he expects it to assume third place by 2021, behind only Walmart and Kroger. (NASDAQ:AMZN) "a launching pad not just for food but possibly drugs as well where customers aren't willing to wait even a day".

Moody's lead retail analyst Charlie O'Shea said the deal could be "transformative, not just for food retail, but for retail in general".

Rollin' Grocers delivers fresh produce and food to neighborhoods in Kansas City.

SELYUKH: For Amazon, the deal gives it a physical presence in hundreds of locations but also places Amazon smack in the middle of a massive consumer goods market - the stuff people buy over and over again for their entire lives.

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