In an interesting announcement today, Amazon has decided to purchase Whole Foods in an extremely lucrative deal that’s making business insiders talk.
Whole Foods Market’s been criticized in the past for not leveraging their earning potential “enough” to satisfy its investors, but their stocks skyrocketed 28 percent after Amazon announced their decision.
As the online market expands, groceries-gone-digital seems like the next logical step.
However, many corporate analysts were expecting Wal-Mart to be a more logical choice to merge with Amazon, since large-scale online shopping outlets (like Amazon) stand out by offering competitive prices–something which Whole Paycheck Foods is decidedly NOT known for.
Of course, critics of retail giants like Amazon and Wal-Mart blame them for the ongoing crisis of small-town businesses folding under increased pressure to compete with the global economy.
We’re always hearing that consumers should “vote with their dollars” to keep small and local businesses open, but when dollars are scarce, that’s not easy to do.
As more and more of our food options are controlled by an ever-shrinking number of hands, all with aggressive profit motives, mergers like these are concerning to the average American.
While over half of Amazon Prime’s customers (which is arguably Amazon’s ideal consumer to serve) earn 6 figures, the median income in America was just $56K in 2015.
What will it mean for the small farmer when Amazon gets in on the bottom-dollar crop prices game?
Ideally, Amazon will make fresh and local foods more accessible to those in inner cities, who may not have access to farmer’s markets or even decent grocery stores to obtain fresh produce.
Rural folks who have food allergies or restricted diets will find it easier to order special foods that simply aren’t available in small town grocery stores.
In more urban areas, there is a rising interest in services such as Instacart, where you can order your groceries from a local store and have them delivered to your door.
One of Amazon’s newest endeavors is called AmazonFresh, which is designed to be an Instacart competetor–an online grocery delivery service.
Aquiring Whole Foods means that AmazonFresh will have 440 exclusive locations in the US from which to offer this service to customers.
Do you shop at Whole Foods or Amazon regularly? What do you think of this mega-merger?
I’m personally curious about why the $13.7 billion-dollar deal is being conducted in cash. I searched, but could not find any specific answers…