In an effort to broaden its presence in the brick-and-mortar retail and fast-delivery markets, Amazon is buying Whole Foods for $13.7 billion, according to a CNBC report.
Although Amazon previously argued that brick-and-mortar stores were becoming obsolete, they are making the move to purchase Whole Foods in order to help the company further penetrate the grocery market, which is significantly more profitable than the e-grocery market.
Until now, Amazon’s push into the grocery sector had appeared to be a competitive move against Walmart, the dominant brick-and-mortar grocery retailer. But by acquiring Whole Foods, it appears that Amazon is targeting high-end grocery shoppers who are concerned about health, and not as worried about cost.
Jeff Bezos, Amazon founder and CEO said, “Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy. Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades – they’re doing an amazing job and we want that to continue.”
Analysts are questioning whether Amazon will now sell Whole Foods products online via Amazon Fresh. Amazon spokesperson Rona Nell previously told Axios that Amazon “works with a variety of vendors and farmers to source our selection” of groceries, which the company now makes available at their AmazonFresh pickup stores.
Amazon’s venture into the grocery business also includes quick localized delivery. Whole Foods already offers one-hour delivery, and AmazonFresh stores offer grocery delivery services within 15 minutes.
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