Amazon Plans Cuts to Shed Whole Foods' Pricey Image

There has been plenty of speculation that if Amazon really wanted to make a presence in the grocery space, it would need to do something major in the brick-and-mortar space.

Exane said Amazon's decision to splurge $13.7 billion (£10.7 billion) on the upmarket chain, revealed last week, shows the online giant is getting more involved in food retail, increasing the chances of a separate deal with Ocado.

Whole Foods has already been reducing prices to try to turn around its worst sales slump since going public in 1992.

For starters, the tie-up between Amazon and Whole Foods will likely hurt local grocery stores, Rep. Ro Khanna (D-Calif.) told CNBC Monday morning. (TGT) suggests investors aren't merely anxious about the threat that Amazon poses to these companies' grocery sales as it digests Whole Foods and potentially expands its footprint, or even the potential of Whole Foods' infrastructure to strengthen Amazon's online retail operations.

Some industry observers say Amazon will find it hard to use Whole Foods to pull away Wal-Mart shoppers because the two stores appeal to different customers.

Still, Mackey admitted the company needed to "evolve" - and it had started that evolution.

Is there a risk that increased automation will lead to job losses at Whole Foods, an issue facing the entire economy in coming years as more tasks are replaced by robots? The hedge fund said the company was undervalued and needed to overhaul its operations and consider "strategic alternatives", code for a sale.

"That (Whole Foods 365) may become a big problem for Wal-Mart", Grant said.

Jana's gains from the deal were estimated by financial media Friday at about $300 million. The company reportedly wants to employ a method of blocking, controlling or redirecting customers' efforts to compare the prices of products in the stores by visiting rival websites on their handsets.

Yes, we'll continue to see prepared foods in demand.

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Another potential shakeup said to be coming is in inventory management.

"Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy", Bezos said, adding, "they're doing an incredible job and we want that to continue".

Brittain Ladd, a former senior manager at Amazon who worked on its brick-and-mortar strategy, said Amazon will use Whole Foods to test concepts for the grocery store of the future.

The $13.7 billion deal for Whole Foods could pay off quickly, but it still runs counter to trends in the tech world, in which fixed assets such as real estate and heavy equipment are shunned, said Amit Sharma, a former supply chain executive at Wal-Mart and now CEO of Narvar, a retail app.

Details of the patent were written in the Post which happens to be owned by Amazon CEO Jeff Bezos.

On Thursday, Bezos took to Twitter to request ideas on philanthropy "to be helping people in the here and now, a posting that generated some 18,000 responses".

What will it take for Whole Foods to settle?

Like groceries (and perhaps even moreso), home improvement retailers sell a lot of items that aren't easy to cost-effectively ship to homes via UPS and FedEx.

More hubs mean quicker and fresher delivery, which will bolster Amazon's existing grocery delivery service, AmazonFresh. But "For other grocers, the deal is potentially terrifying". "This should be a concern, not only for food retailers, but also for food brands".

"The first thing Amazon is going to do in this acquisition is to remove all those third-party vendor services", he said.

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