BUSINESS

Amazon Set To Shake Up Grocery Market

In a dramatic move, Amazon has announced that it will be buying Whole Foods for $13.7 billion.

This new move by Amazon is another push to get a piece of the market in the brick-and-mortar grocery stores setup.

This new venture will also allow Amazon’s ownership of a natural and organic grocer pioneer with 456 stores and a foothold in the new age, millennial shopping environment.

It could also force competitors to restructure their business and change market strategy.

Already, the announcement has sent shock waves in the market as shares of dozens of supermarkets, food producers; payment processors and shopping malls collectively lost at least $35 billion in U.S. market value on Friday as the news hit the financial markets.

Kroger Co fell 9.2 percent, while Wal-Mart Stores Inc stumbled by 4.7 percent, amidst fears that Amazon could use its market leverage to cut prices on the market.

Amazon’s shares rose 2.4 percent to $987.71, adding $11 billion to its market capitalization, which makes the acquisition a sweet deal for Amazon shareholders.

That $42 per share offer for the upscale supermarket chain is a 27 percent premium on Thursday’s closing price.

According to press reports, if the deal goes through, Whole Foods will keep its name, CEO, and headquarters in Austin, Texas.

The deal still is yet to be approved by shareholders and regulators. It’s expected to close in the second half of 2017.

Nigel Belle, Readers Bureau

Edited by Jesus Chan

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