Kantor noted that Amazon's market cap gain roughly equaled the amount the company is paying for Whole Foods.
That is by design, not because they can't come up with any ways to make money. That more than pays for the gadget itself, and is in total congruence with the value that Amazon keeps adding to its products. It has four "365 by Whole Foods Market" stores that are cheaper to build and operate than a traditional location and offer lower-priced items aimed at younger shoppers.
The move gives Amazon access to Whole Foods' 460 stores in the US, Canada, and Britain - most of which are well-located in desireable areas. But it's not a "startup" in terms of its corporate approach or corporate organization.
Amazon has left cultures intact at other companies it purchased. An active partnership with Whole Foods knocks down that wall completely and already is being touted as a new day for the industry.
Critically, this is how Whole Foods' competitors also operate. Target's per share dividends have doubled in the past five years. Conagra and the midtier companies are probably going to be the most hurt. But fundamentally they expect to see profits and they expect to see those profits get paid out.
"The goal of all of this is to make it easier to buy", he says. Amazon shares traded almost flat at about $996.87. But it operates like a startup.
Instead, the company's cash flow is all pumped into new things. They're so smart. They're so authentic. They have a slightly wacky idea to revolutionize the convenience store.
There are deals, and then there are big deals. Six bookstores, a staff-less experimental outlet and 465 Whole Foods plots are up for protection at this point. I'm- I'm- I just want you to trust me. But the era of ultra-high prices may be coming to an end. With the WFM acquisition, it jump-starts the attack on one of the least penetrated categories - groceries. Plus, he wrote, Grubhub's delivery infrastructure could be applied to groceries.
Whole Foods already has a separate store, called 365, which offers private-label goods and lower prices than its typical formats. That included potentially using technology to eliminate cashiers.
"This will only help Amazon, whole foods consumers, this is a win-win for everyone", says Lempert. According to Kantar Retail, selling food online is inherently complex, and in 2016, online shopping accounted for just 2% of the grocery sector's sales. Acquiring Whole Foods' brands and supplier networks could be very useful enhancements there. Sure it's a major buy for Amazon, $13.7 billion for a grocery chain, but even rudimentary business goons like us can see the why of it. "There was a sense that that was changing, and now [Amazon] is right in the middle of the industry if this deal goes through". From the standpoint of an executive at a conventional business it must seem extraordinarily unfair. And - when we huddled together, it was like we just had - we just had these big grins on our faces, like, "These guys are wonderful.' They're so smart". So far, history hasn't shown us many examples of companies who've been able to pull it off.