Scott Galloway: Amazon + Whole Foods = $1 Trillion Market Cap

Now the deal will likely quicken those efforts.

Rohit Anand, a principal at KTGY Architecture + Planning, said Amazon's bet on brick and mortar retail speaks to the company's belief it can blend what it offers online with the high-touch service of a Whole Food grocery store for an overall shopping experience that doesn't presently exist. Most are barely in the online game (the average rating of Canadian grocers' iPhone apps is 2 out of 5).

A bit more specifically, Mr. Mackey said Amazon ownership is likely to bring considerable innovations into Whole Foods stores.

Kroger Co., for instance, has touted the opening of Murray's cheese shops in some locations.

Another person familiar with the situation told Bloomberg that Whole Foods has had a quiet week in the wake of the Amazon bid, suggesting that a bidding war isn't imminent.

Leonard noted his chain is known for free samples and costumed farm animals that walk around stores and greet shoppers.

This shows when looking at the numbers.

WCPO Insiders will learn how Kroger's history with Walmart prepared the company for its next big challenge. He described the meeting as a blind date set up by mutual friends.

But because of the growing number of retailers courting the natural and organic food shopper, some food companies are bypassing Whole Foods.

Even if you successfully navigate the ordering, transporting, storing, pricing, and timeliness issues, there's the customer issue: grocery selling remains an incredibly crowded, highly competitive business. Whole Foods may be a niche player, it still generates a 15.7 billion euro turnover with 431 stores in the U.S., thirteen in Canada and nine in the United Kingdom. By comparison, about one-fifth of all electronics and appliances sales in 2015 were online, according to the report, totaling more than $20 billion that year. "Right now, it's a wait and see to see how the stores work and what they implement".

Walmart could face an antitrust charge if it were to make an offer, although the charge would be a stretch. Kroger has almost 2,800 stores that operate under a variety of names. Walmart is experimenting with other services: some staff deliver groceries on their way home. Instacart, which operates in 69 markets, counts partners including Costco, Publix, Target and Wegman's.

While most grocers try to figure out what to do with the enormous amount of data available to them, Amazon generates even more data and uses it to adapt to a shifting clientele. Over the last few years, Amazon and Walmart have begun encroaching on each other's respective territories, becoming the other's main competitors in many ways. They continue to have a different culture than Whole Foods but also have similarities that can be a success if this deal is completed.

The rest of the $800 billion grocery industry has been slower to modernize. Given its ability to fuse efficient distribution and strong strategic market insight, Amazon could well become the leading food retailer in North America. Only two percent of today's $700 billion in annual grocery store sales are made online. "If their share price goes down, it's a sign they'll be under more competitive pressure", said Alden Abbott, antitrust expert at the Heritage Foundation.

As Amazon.com Inc looks to swallow US grocery chain Whole Foods, China's tech giants are already digesting hefty bricks-and-mortar deals, taking the lead in the battle to transform supermarket shopping with big data and better supply chains. Smaller regional players that don't have the resources to compete would be at a big disadvantage.

And in turn, the company could revive its recently stalled ambitions to expand to 1,200 US stores.

That's the goal with Amazon's Whole Foods takeover, which is slated to be completed in the second half of the year. The deal would allow Whole Foods CEO John Mackey to remain at the helm of the supermarket chain when the deal is expected to close later this year.

Vanessa Coleman

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