Amazon on collision course with Wal-Mart with Whole Foods deal

Whole Foods

Using industry share figures compiled by brokerage firm Cowen past year, and crunching them in University of North Carolina law professor Andrew Chin's useful HHI online calculator, the supermarket industry comes out with an HHI of just 1,267-about half of the 2,500 score the government uses to define a highly concentrated industry.

News of Amazon's purchase of USA supermarket chain Whole Foods for $US13.7 billion ($17.9 billion) has sent global retailers into a spin, but closer to home, one expert says the deal could have a longer term impact on the supermarket wars.

Here's how leading retail analysts saw Amazon's move. It is also expected that Amazon could shave off a few margins from the Whole Foods business to offer cheaper groceries and disrupt the market.

There's a strong sense from investors that Amazon is upending the entire business.

Groceries are already a fiercely competitive business, with low-priced rivals like Aldi putting pressure on traditional supermarket chains and another discounter, Lidl, opening its first USA stores just this week. It is not strictly limited to food but to all groceries instead, and it simply allows for a wider selection and faster delivery time of such products than normal Amazon. While it won't alter Amazon's ambitions in digital or put a stop to innovative experiments like AmazonGo, it puts the food business on a different and steeper growth trajectory. He benefited in 2013 when a USA court ruled that Apple and the top five USA publishers had conspired over ebook prices to the detriment of Amazon and the consumer.

Amazon could try to use automation and data analysis to draw more customers to stores while helping Whole Foods cut costs and perhaps prices.

It had previously signalled its intent in grocery with its Amazon Fresh proposition and a United Kingdom tie-in with Morrisons, and offers a one-hour delivery service with a number of USA independent wine retailers, and was already trialling a revolutionary new "grab and go" bricks and mortar grocery store for food and alcohol in Seattle, although it has yet to open the to the public.

Shares in Ocado leapt this morning as investors began to speculate following Amazon's $13.7bn (£10.7bn) takeover of upmarket USA grocer Whole Foods on Friday.

Shares of dozens of supermarkets, food producers, payment processors and shopping malls collectively lost at least $35 billion in US market value on Friday as the news reverberated across financial markets. Also, it may be seeing the last mile as a real prohibition to profitability in multi-temperature goods. Whole Foods' online presence is tiny, estimated at just $100 million, and executed through its web partner grocer Instacart.

Joking aside, the purchase will mean a serious disruption: rather than a brick-and-mortar store getting into e-commerce, in this deal an online behemoth will be moving onto Main Street, and in one fell swoop acquiring more than 450 stores in the US, Canada and Britain. "Having said that, there is probably no doubt that a material new ingredient has been thrown into the global grocery sector M&A melting pot". More than 57 percent of Target's regular customers use Amazon's Prime membership program, according to consultancy Magid Associates, compared with 42 percent of all consumers. "From a credit perspective, Amazon has over $2 billion cash and investments, and leverage of under 2x at the most recent quarter end, so significant amounts of financial flexibility are clearly evident".

When it comes to the Whole Foods deal, though, there is little reason to fear an Amazonopoly. The leadership of the business remains in place and it is likely to continue focusing on executing its turnaround strategy. 'Whole Foods Market has been satisfying, delighting and nourishing customers for almost four decades - they're doing an wonderful job and we want that to continue.

"Why does Amazon buy Wholefoods?"

"However, access to product and distribution points will determine its success, particularly in grocery". Stores are ideally located for that. Customers had to open the Amazon Go app on their smartphones and scan a special QR code at the door that would log them into their Amazon account before entering the store. Developing PL is time consuming.

Related News:

  • Gingrich on Trump's WH Bid: 'Lot More Fun Than a Yacht'

    Gingrich on Trump's WH Bid: 'Lot More Fun Than a Yacht'

    Attorney Patrick Fitzgerald to investigate the unauthorized disclosure of the identity of a Central Intelligence Agency employee. Gingrich said that as president, Trump was well within his authority to fire the head of the Federal Bureau of Investigation .
    Celtics to trade No. 1 Pick to 76ers

    Celtics to trade No. 1 Pick to 76ers

    Fultz led the Pac-12 in scoring and finished No. 6 among all Division I players, and was the top freshman scorer in the country . When I saw that I thought it was pretty cool, pretty amusing . "I just wake up and go where they tell me to go", Fultz said.

    Ronaldo at his best, but Portugal held

    However, the first match on the second day could be one of the best of the group stage as Portugal face Mexico . A defensive error allowed Carlos Vela to get on the ball, and his hooked cross was headed in.
  • Injured Australian bull rider improving

    Injured Australian bull rider improving

    Gray entered the finals as the 152nd-ranked bull rider in the world, according to Professional Bull Riders. Gray rode just one practice bull in preparation for this event. "That's what you need to do".
    Los Angeles lighting Bat-signal for Adam West

    Los Angeles lighting Bat-signal for Adam West

    Adam West attends a " Batman: Return of the Caped Crusaders " event at New York Comic-Con on October 6, 2016 in New York City. West will play his iconic Batman role one last time in the animated film Batman vs.
    Canadian Henderson tames strong winds for fourth LPGA win

    Canadian Henderson tames strong winds for fourth LPGA win

    Feng is trying to complete a MI sweep after winning the LPGA Volvik Championship three weeks ago in Ann Arbor. In a three-way tie for third at 266 were Su Oh, Madelene Sagstrom and Moriya Jutanugarn .
  • Ben Carson breaks with Trump administration on special counsel, Russian Federation  investigation

    Ben Carson breaks with Trump administration on special counsel, Russian Federation investigation

    The Twitter attacks came as Vice President Mike Pence hired a personal lawyer to represent him in the intensifying investigation. And, short of firing Mueller - which would be political suicide for Trump - he just has to wait and see how it plays out.
    Soccer Fans Eagerly Await Start of FIFA Confederations Cup 2017

    Soccer Fans Eagerly Await Start of FIFA Confederations Cup 2017

    Chile is ranked fourth, but lacks the same tradition as Portugal and Mexico and has struggled in South American qualifying. The teams drew 0-0 in a friendly in 1969, and in 2014 Portugal won 1-0 in another exhibition match.
    Moment of silence for London fire victims

    Moment of silence for London fire victims

    Emergency services have been faced with scenes of utter destruction inside London's Grenfell Tower following massive fire. Much of the west London apartment block, home to hundreds of people, was ravaged by flames in the early hours of June 14.
  • Trump still tweets 'Witch Hunt' but attorney says president isn't under investigation

    Trump still tweets 'Witch Hunt' but attorney says president isn't under investigation

    Rep. (D-Calif.), the top Democrat on the House Intelligence Committee, that Congress would "unite to stop [Trump] if he tried to fire the two men".
    Mueller Has 'Not Yet' Decided to Investigate Trump

    Mueller Has 'Not Yet' Decided to Investigate Trump

    Angus King, an independent from ME , stressed that the probe will likely last for a long time . Craig, who led the legal team defending President Bill Clinton against impeachment charges.
    Portugal Forest Fire Victims

    Portugal Forest Fire Victims

    The media in Portugal report that the fire is out of control, even though 600 firefighters are fighting to extinguish it. Portugal's president says the country's pain "knows no end" as it mourns at least 61 people killed in the deadl.


Most liked

United Kingdom election: Theresa May could lose parliamentary majority, exit poll shows
While the party backed Britain's exit from the European Union , it has pushed back in the past against a "hard Brexit". The party has called for a second vote on whether Scotland should separate from the United Kingdom.

Investigation Is "Witch Hunt"
The Twitter attacks came as Vice President Mike Pence hired a personal lawyer to represent him in the intensifying investigation. Comey testified that initial explanations that he was sacked because of poor leadership were "lies, plain and simple".

CMT Awards Feature Stars From All Genres, Hollywood
Perhaps Ashton Kutcher brought the Nashville Predators some luck with his stunt during Wednesday's CMT Awards . Additionally, the Brothers Osborne and Peter Frampton will perform together for the first time ever.

Russian Federation 2-0 New Zealand: Hosts win Confederations Cup Group A opener
Petersburg Arena into the setting for a spectacular and bright show, with more than 2,000 actors involved in the performance. In the 31st minute, New Zealand defender Michael Boxall scored an own goal after Denis Glushakov had struck the post .

ACCC Begins Recruiting For Broadband Test
The ACCC is now investigating whether ISPs could have misled customers on their actual broadband speeds. The ACCC went to tender on May 30 for an independent testing provider for the program.

Champions Trophy final: India win toss, elect to field first
Kohli's dismissal for five following a golden run in the tournament prompted gloom among the India supporters. Azhar Ali (59), Mohammed Hafeez (57) and Babar Azam (46) also played solid to prop up the Pakistan innings.

UK official: Fire building materials broke rules
He says it may be necessary for numerous outmoded tower blocks built in the 1970s to be demolished because of safety concerns. Police also said that the number of people missing and assumed dead had risen from the previously official toll of 58.

Vehicle hits people near London mosque, several hurt
Warfa said numerous people in the street were worshipers who'd been attending late-night taraweeh prayers at Finsbury Park Mosque. Vanzella said she went to the window and saw "loads of people gathering" in a corner across the road from her window.

Philando Castile shooting: 18 arrested in protests over Minnesota officer's acquittal
The mostly-white jury deliberated for some 29 hours over the course of five days this week before reaching the not guilty verdict. During the session, Coleman was asked if the city would block access to the interstate during future marches or protests.

Antonio Conte Reportedly Could Quit Chelsea over Club's Lack of Transfers
Chelsea's contract negotiations with keeper Thibaut Courtois have stalled with his £100,000 per week deal expiring in two years.

Vehicle hits pedestrians in London, several wounded
On May 22, a suicide bomber killed 22 people at a concert by American pop singer Ariana Grande in Manchester in northern England. The London Ambulance Service tweeted that it had sent "number of resources" to the site after being called in around 12.15 am.

Russia investigation: Attorney General Rosenstein might recuse himself
After Trump fired FBI Director James Comey , Trump said that Comey had told him three times that he was not under investigation. In an attempt to inoculate the Trump administration from criticism over Comey, many top officials have heralded Rosenstein.

Taliban storm Afghan police compound; 1 police dead
Sseven US servicemen were wounded and one Afghan soldier was killed in an insider shooting at a base in northern Afghanistan. John Nicholson, the US commander in Afghanistan, to deploy betweeen 3,000 and 5,000 additional forces to the country.

Man drives into crowd of people leaving mosque; 1 dead
One man was killed and another eight have been injured after a van drove into worshippers close to a mosque in north London . Eyewitness Cynthia Vanzella said it was a mixed community, with people from many different countries and cultures.

Baseball practice shooting raises debate over gun control
McAuliffe repeated that he was not there to discuss gun control measures, though he noted he would stand up for the safety of all. There is also no gun registry in Virginia, and there is no such thing as a concealed carry permit for long guns.