Amazon Buys Whole Foods

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Amazon Buys Whole Foods

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Publication Date:
December 12, 2017

Industry:
Technology

Industry:
Food & Beverage

Industry:
Retail & Consumer Goods

Industry:
Agriculture

Source:
Harvard Business School

The June 2017 news that e-commerce giant Amazon was paying $13.7 billion for organic supermarket chain Whole Foods precipitated a broad sell-off in the shares of grocery retailers and suppliers. Behind the precipitous declines lay recognition that Amazon’s bold move into brick and mortar assets offered transformational opportunities. Amazon could gain expertise in perishable product sales and procurement, plus access to 30 million well-off shoppers and 463 grocery stores in key U.S. markets. Whole Foods could absorb Amazon’s technology and process expertise to modernize and reduce its operating costs, which were among the highest in the industry. For grocery retailers and suppliers, the deal portended increased competitive pressures in a saturated market. As 2018 dawned, all parties were assessing the deal’s implications. Had the stock market overreacted to news of the deal? Why was Amazon buying Whole Foods? What were the long-term implications of the deal for the food value chain?

Copyright © 2021 Harvard Business School Publishing. All rights reserved. Harvard Business Publishing is an affiliate of Harvard Business School.

Amazon Buys Whole Foods

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