Amazon to Acquire Whole Foods Market
7This could get interesting. Amazon and Whole Foods Market (aka Whole Paycheck) today announced that they have entered into a definitive merger agreement under which Amazon will acquire Whole Foods Market for $42 per share in an all-cash transaction valued at approximately $13.7 billion, including Whole Foods Market’s net debt.
http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=2281414
- 19 comments, 37 replies
- Comment
This could really push Amazon Fresh in a good direction. Or it could gut the quality of Whole Foods Market.
@Thumperchick Yes. Knock those snobs that shop there down a peg or two!
@Thumperchick and it’ll go after Jet.com’s extensive fresh grocery options that ship anywhere, not just in “certain” Amazon (large city) markets.
@Thumperchick whole foods is doing that to themselves lately, so I expect it to flip back.
@Thumperchick I vote for gut
I like whole paycheck
Curious about this - wonder if it’s gonna be used for infrastructure for Amazon’s storefront prototype.
@woodhouse Please don’t scare me.
Now I’ll have nightmares
/giphy nightmare
So maybe I’ll be able to get Amazon Fresh (or whatever it’s called) in my neighborhood now. (fulfilled through local Whole Foods) I just bought that Echo Wand thing. https://www.amazon.com/dp/B015YEXOR2
@medz I just bought one too, but I have no idea what I will do with it. I may try to use it as a mini-Echo Dot.
@heartny I’ll probably just take it places with me and suspiciously scan things at friends houses, at the office, or in stores. If confronted, I’ll run out of there without saying a word.
Honestly, though, this could help me with keeping a shopping list. I’ve tried adding to a shopping list via Echo or Okay Google, but I end up just using a checklist in Google Keep that is synced between the wife and me. (Google Voice Assistant tries to create a new shopping list instead of adding items to my existing Keep list.) If I can get this to build a nice shipping list that can sync to our phones, it would be nice.
@medz i didn’t bite last night and now they are out of stock… i should have.
Wait… at a different url they are still available but with a delay in shipping:https://www.amazon.com/Amazon-Dash-Wand-With-Alexa/dp/B01MQMJFDK
AMZN stock is up 3% this morning, against the rest of the market, which is down. AMZN is also building two ‘fulfillment centers’ aka warehouses around here, one of which is an easy drone flight to my house. I’ll watch this carefully. Thanks!
This looks like a smart move to me on both sides. (Perhaps not great for the Whole Foods employees tho.)
Interesting.
@f00l It’s all about the money, for one person. http://www.businessinsider.com/jana-partners-amazon-whole-foods-merger-2017-6
@OldCatLady
I’m not really surprised.
A little surprised that Whole Foods left itself open to that.
The Whole Foods CEO, John Mackey, is not an entirely lovely person tho.
Anywhere stating along the likes that “Whole Foods will operate as they always have.”?
@narfcake ha! Several years later, the Whole Foods CEO will start a less enthusiastic company called Partial Foods.
@medz Hah!
7 years ago, @snapster wrote:
Wait … further down:
Then again, without the buyout, Mediocre and meh wouldn’t exist.
/image meh kitten
@narfcake Your guess…
Dear Valued Shopper,
Today marks the beginning of an exciting new chapter in Whole Foods Market’s history with the announcement that we’ve entered into an agreement to merge with Amazon.
Amazon is an innovative company and we are excited about our partnership. We believe it presents an incredible opportunity to take Whole Foods Market’s mission and purpose to new levels and will create significant value for our stakeholders – including you, our most loyal customers.
We want to assure you that Amazon shares Whole Foods Market’s deep commitment to quality and customer service. We will continue to operate our stores and deliver the highest quality, delicious natural and organic products that you’ve come to love and trust from Whole Foods Market.
No artificial flavors, colors, preservatives, sweeteners or hydrogenated fats will ever be in any of the food we sell. Meat will still come from animals raised with no-added growth hormones, ever. And all eggs in our dairy cases will continue to come from cage-free hens that aren’t given antibiotics. Those standards are core to Whole Foods Market and we will remain committed to them.
Whether you’ve been a Whole Foodie for 30 days or 30 years, you have been an important part of making Whole Foods Market what it is today. We look forward to sharing the next chapter with you.
From,
Your Whole Foods Market Team
@RedOak @medz “Partial Foods”, here we come!
@RedOak
Whole Foods may not change much in obnoxious ways, or may change very slowly.
Their customer base feels a serious sort of “cultural ownership” and their key customer base is very well-heeled and very vocal.
And these customers are locally and nationally influential in a way that Woot’s community couldn’t possibly pull off.
Many companies have found that you piss off the soccer moms and yoga moms and their families at your peril. Those families will walk straight across the street to Sprouts or head toward a local farmers market or coop. And they will be vocal and visible about it, in the very media that some percentage of these moms have an ownership stake in.
And they will be low-key-self-righteous in a very nice, smart, educated, visible, concerned way. This is hard to defend against.
No news organizations were in a hurry to talk with the loyal Woot community about how Amazon destroyed the things that made Woot wonderful.
If the Whole Foods target moms become dissatisfied, that’s front page news, and it will visibly trend on YouTube and Twitter. That story will get video in prime time on cable news.
You will have the most influential women in the country staking opinion territory.
None of this will protect how employees are treated tho.
@narfcake
@medz And a boutique donut and bagel shop called Hole Foods.
@moondrake ah!
“A Hole Foods Company”
/giphy hilarious
@Medz Partial Foods?!!
They need somebody to actually pay for the obscenely expensive new store they’re building near us. This drawing doesn’t do it justice…
@RedOak “Obscenely expensive” is standard for retail store construction.
@RedOak
That obscenely expensive store will almost certainly be profitable. They known what they’re doing with marketing, positioning, imaging, experience, ambience.
@f00l @narfcake. Yep.
But the store they’ve moving from and have been in for 10+ years is a tear-down. An amazing contrast.
The co-CEOs came and spoke to us at Michigan back in the late 80’s. Very interesting guys. Surprisingly humble for CEOs of what now employs approaching 100,000 people.
I remember scratching my head wondering how a co-CEO situation could survive but they had good chemistry and focused on different things. I think one of them recently retired.
@RedOak I’m jealous
Tonight at an Art Fair there was a Whole Foods tent. When I asked them what they thought of the fancy new store being built their response surprised me.
Rather than, yah, isn’t it amazing, they said, “what about the old location?” (WF is/soon to be was, an anchor in a small strip about a half mile from the new store) “What’s going to happen there and with the 5-8 other smaller store fronts? Nobody is going to want to take it over.” They’re probably right.
Why consumers really, really want to shop at Whole Foods.@f00l had a theory about education and length of life; this is one of the factors. The new, subtle ways the rich signal their wealth
@OldCatLady
a lot depends on what you have to shop at.
Sprouts here has always been a joke. Looks like Kmart on gangbanger day. Been awhile, maybe they have cleaned up their act.
Trader Joes is dirty, old and cramped, you can’t even get 2 carts down an aisle and they have such limited merchandise
We have a local store that sells high end stuff and does incredibly well. I don’t buy toilet paper there, but the quality of their meat is head and shoulders above everywhere else.
When I drive the hour (yes hour) to whole foods I’ve been very happy. The selection is awesome and I like that their coffee still mostly has a roast date not a use by date and that they feature local and regional products as much as they can.
Yes, I an afford the luxury of shopping there, and if there was one as close to me as to my daughter, I’d shop there regularly. And I’m over 60 and if I’m going to bother to cook, I’m cooking quality.
We for some reason never met their demographics to get one even though the mayor of the city next door tried really hard to do it. They are a blue city and have a high socioeconomic status and a high volume of lactovo vegie and vegan folk. They would have made a mint.
Sprouts laughed at him even harder. Shows you how smart they are.
We tried them out a couple of times, and found Sprouts to be far more reasonably priced. We tried out their restaurant and found the food to be very good, but way too expensive for paper plate food. I’m on their Meetup Group but so far they’re aimed at Millennials and yoga moms. The coordinator promised to come up with some activities aimed at the retiree set soon.
Fascinating, the divergent views here about WF. One would have expected this apparently frugal crowd largely not to be fans.
And yet there clearly are WF lovers - both based on the comments and the staring of comments.
Personally, I can’t justify paying their prices but I’m impressed by their ability to draw customers who will pay.
But then we have a pretty competitive grocery market with a varied and plentiful range of solid choices from ma & pa boutique joints to regional to national.
@RedOak Being frugal doesn’t mean that we can’t/don’t splurge elsewhere.
@RedOak
Overpriced. I only rarely visit.
I respect what they’ve done.
They started out as a hippy food store in Austin. Then they turned it into a successful educated, upscale “thing”.
After that, they managed to focus international consumer and media attention on food sourcing and quality; and more than any other person or organization I can think of, they monetarized and popularized the “boutique quality foods” industry and made in into a thriving area of business potential worldwide.
@f00l So tonight we walked through what was billed as an “art fair” a couple towns over. It was really a beer stand exhibit hiding under the “art” banner - we have a pretty solid array of micro-breweries in our state - I think top ten in the country. There might have been 2 or 3 “art” tents.
Anyway, there was a Whole Foods tent and I was curious what they thought of the Amazon news. They weren’t all that eager. I think they enjoyed the independent path WF takes and might have been concerned about it continuing.
BTW, the WF folks thought they had heard all the Amazon jokes by this evening.
That prime membership is finally gonna pay off.
@thismyusername Amazon will figure out how to make it an add-on (extra cost) “feature”.
90% of the food I get from Whole Wallets is just the cooked bacon they have on the breakfast bar. If this means I can get that delivered on the weekends by Amazon Fresh/Prime Now/Pantry, I’m all in.
I look forward to the 1.75 year from now story about the current Libertarian CEO leaving after “intractable” differences on ways to run the business and needing to take time off to find a new line the helps “deliver better value to the customers while preserving the means in which value is delivered.”
Further down, a story about how an Amazon drone crash is expected to delay drone delivery services for another few months.
Our local Whole Foods has competed successfully against a Publix, a SuperWMT, and a local health food store/deli, all within a half mile. However, also within that half mile, Trader Joe’s is set to open next year. Let the competition begin!
@OldCatLady there’s no competition.
@Cerridwyn
We have a brand new While Foods, a Sprouts, a Trader Joe’s, all competing within the nexus of the same top 2% neighborhood. They’re all booming. Also doing very well in the same demo market are two upscaled-and-organicized-to-the-hilt versions of normal supermarkets. Also doing well AFAIK.
They’re all very pleasant places to be. Just after work and on Sat mornings, no parking more or less at any of them.
Sorry that your Sprouts and Trader Joe’s aren’t as nice. I don’t think your experience of those two not being nice places to be is necessarily typical.
@f00l It isn’t
The trader’s about 15 miles away is nice. The trader’s in town is really old, and they’ve put nothing in it to keep it up to date so other than the loyalists, they shop elsewhere. it is right next to a Vons (Safeway) that recently remodelled it’s outdated produce department. It is cheaper, has a better selection and the items are fresher.
As for Sprouts, they expanded out here a few years ago (not close but not far) buying out a very popular small local chain that had a decent following. Again, they didn’t put anything into making them nice. And much of the products I liked in the old store went away and the selection went a lot to stuff I’d never ever buy.
There is rumor of a new Sprouts coming not too far away. Guess we’ll see how they do.
Local produce in much of California is a given, so you have to compete with the farmer’s markets on quality more than price. When I can buy fresh picked strawberries that are vine rippened and as sweet as candy, why would I buy it elsewhere?
kewl 2buck chuck on whine woot!
More info:
The guy (Barry Rosenstein) who runs the hedge fund that forced the sale is quite wealthy. He just purchased the most-expensive-house purchase in the US ever, 18 acres, for $147M, in 2014. On Long Island.
The house purchase info is here:
https://www.google.com/amp/nypost.com/2014/05/03/activist-investor-buys-east-hampton-mansion-for-record-147m/amp/
He calls himself an activist investor. I think that translates to “financial predator”. But that’s the way we allow people that sort of thing here, if you are publicly traded and not loaded with poison pills.
More about Whole Foods history, and how they were pressured into the Amazon sale, is here:
THE SHELF LIFE OF JOHN MACKEY
Whole Foods’ eccentric founder changed the way Americans consume food. Can he survive the Wall Street forces that now want to consume him?
JUNE 2017
BY TOM FOSTER
Texas Monthly
http://features.texasmonthly.com/editorial/shelf-life-john-mackey/
@f00l Hmmm, maybe I’ll drive out there and pay him a visit. Having lived through the impact of activist investor Carl Icahn’s push for eBay to spinoff PayPal, I suspect the Amazon/Whole Foods deal won’t go well for WH employees in the long run.
@heartny
If he starts to care about people, he might wind up in a home that doesn’t cost $147M, and just have so few options for his life, practically living on the street like that.
@f00l Great read. I can only wonder now how things will change in the next 5 years for WF under Amazon …
I see it like, Amazon bought themselves a network of refrigerated warehouses that also double as storefronts.
Perhaps over time they will board up part of each store and use it for order fulfillment. Maybe even replace those pesky meat-based humans with gleaming cool automation.
My local Harris Teeter does that thing where they shop for you and put the orders in your car and they have just recently reorganized the store to create more space for refrigerators to store orders.
Only a small fraction of grocery shopping is done online so this is where the growth potential is.
I’ve been thinking a little about this as I’ve been experimenting with Jet fresh orders and aside from a few broken eggs the experience is excellent (meaning “Jet is burning cash to grow a loyal customer base”). Thing is, they send me groceries from New Jersey (I’m in NC) and that is just ridiculous (soooo… many… ice packs). I imagine they’d love to have warehouses in more cities so they don’t have to refund so many broken eggs, but Amazon solved that issue for a mere ~$14billion (Jet is much smaller, Wal-Mart paid ~$3billion for it, and Wal-Mart generally doesn’t come up with Bezos-level Evil Genius ideas).
@awk You absolutely nailed it, accordingly to Slate. ’ You, an Amazon Prime customer, can shop for groceries at Whole Foods on Amazon and then choose an option to pick up the groceries on the way home. (Maybe there’s even a discount for doing so.) And, of course, you might then be offered the option to order a bunch of other stuff on Amazon (a couple books, some socks, garden tools) and choose to pick those things up at Whole Foods at your convenience. And when you go to pick up the goods, you might also drop off a jacket you bought on Amazon that needs to be returned. Whole Foods may well be about to become Amazon’s second user interface.’
I went in to check for steaks on sale and heard, not kidding, 10 people ask the employees “what do you think? did you hear? what do you think?” just walking from front to the meat counter.
I tried to get a discount with “but I have amazon prime!” and received only a pained look.
@thismyusername joke not so funny 500th time you’ve heard it.