Does Whole Foods have customer service
Amazon became big as a fright of classic retailers. But now the world's largest online retailer in its home market of the USA is itself the owner of a chain of organic supermarkets. It's a challenge to rivals like Wal-Mart. Their share prices plummet.
In a strategic turnaround, Amazon is making a major entry into the stationary grocery trade in the USA. The world's largest online retailer is taking over the Whole Foods Market organic chain for around 13.7 billion US dollars. With its largest acquisition to date, Amazon is increasing the pressure on its rivals in the USA: It is a clear indication of plans for an empire of online and offline business. Investors steamed away billions in the market value of competitors.
Whole Foods Market operated 461 grocery supermarkets according to the latest figures from the spring. A large part of this was in the USA with 440 stores, a further 12 were in Canada and 9 in Great Britain. The company, founded in 1978, specializes in high-quality - and correspondingly expensive - food.
Amazon rushes ahead - Wal-Mart never sleeps
In the past few years, Amazon had put brick-and-mortar retail under great pressure, including with lower prices. In the grocery business, the online retailer pushed ahead with, among other things, the Amazon Fresh service, which was recently launched in Germany. The group has recently shown more and more interest in the business with shops. Amazon opened several bookstores in the USA and is also forging plans for small high-tech supermarkets that can be operated by a few employees.
In a countermovement, the American supermarket giant Wal-Mart expanded its online business more and more - and just on Friday bought the fashion retailer Bonobos for 310 million US dollars. With the two acquisitions, the two heavyweights are raising their rivalry to a new level. With the acquisition, Amazon is getting stationary shops in good locations in 42 US states and could, among other things, accelerate the delivery of goods and improve customer loyalty.
Shock waves in the stock market
Investors had a clear opinion on who they believed had the better chance: Wal-Mart shares temporarily lost over five percent in early US trading, the price of competitor Kroger even plummeted more than twelve percent and Target lost over eight percent . For the Amazon paper, on the other hand, it went up by around three percent.
The shock waves of the announcement were also felt internationally: The shares of the Dutch company Ahold lost around nine percent at times, the Carrefour paper fell by over three percent and for the British competitor Sainsbury by more than four percent. The share of the German Metro group fell by around 1.2 percent.
The purchase price for Whole Foods also includes the grocer's debt, Amazon announced. The company had recently put it at around $ 3.1 billion. The $ 42 per share in cash is a hefty addition to the closing price of a good $ 33 on Thursday.
Jana Partners as "greedy bastards"
The largest shareholders in Whole Foods were recently various financial investors. One of them, Jana Partners, was recently dissatisfied with the business development at Whole Foods and had pushed the company to sell.
Whole Foods had only increased sales by one percent to just under 3.74 billion US dollars in the last quarter, while profits fell year-on-year from 142 to 99 million US dollars. A good 97 percent of sales are generated in the USA. According to the latest information from last fall, Whole Foods had around 87,000 employees.
The formative co-founder and boss John Mackey should also remain at the top of the chain under the umbrella of Amazon. He recently described Jana Partners as "greedy bastards" in an interview and assured them that they would not get control of the company. The stores should continue to work under the previous brand, emphasized Amazon.
For the online retailer, it is by far the largest acquisition in its history after the purchase of the Twitch platform, which specializes in streaming video games, for around one billion US dollars in 2014.
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