Amazon stumps up nearly $US14B for Whole Foods Market

A customer pushes a cart while shopping on the opening day of the 365 by Whole Foods Market store in the Silver Lake neighborhood of Los Angeles

Americans have been slowly moving toward online grocery shopping.

Whole Foods, often derided as "Whole Paycheck" for its high prices, could see its reputation change if Amazon, a master at undercutting its brick-and-mortar rivals, passes any savings from automation to customers.

The deal has the possibility to be "transformative", Moody's lead retail analyst Charlie O'Shea said in a note, "not just for food retail, but for retail in general".

Its own market value increased by $15 billion on the news.

For instance, Wal-Mart Stores Inc (NYSE:WMT) shares slipped almost 5 percent, while Kroger Co. The deal is estimated to be worth almost $13.7 billion, at $42 per share.

In a news release, Amazon said it would acquire the upscale supermarket chain for $42 a share in an all-cash transaction that includes that company's net debt, Efe news reported.

Amazon's ownership will also likely result in lower prices at Whole Foods, whose expensive products earned it the nickname "Whole Paycheck".

The deal would give Amazon control of 430-plus U.S. Whole Foods stores, almost all of which are in neighborhoods more affluent and younger than America as a whole, noted David Portalatin, the NPD Group's vice president of food industry analysis. Kroger was down as much as 17%, Supervalu Inc. dropped as much as 22% and Weis Markets slumped as much as 9.6%.

And because customers can buy foods and bulk items like toilet paper from a single retailer, discount retailers such as Costco, Target and Walmart should feel threatened, too.

Amazon has been looking at shop layouts that could allow traditional in-store purchase, online ordering with on-site pickup, and home delivery, using store warehouse space as a distribution point, Ladd said. That prodding irked Mackey, who has referred to Whole Foods as his "baby" and to Jana as "greedy bastards".

"They're doing an fantastic job and we want that to continue", Amazon founder and CEO Jeff Bezos said. When Amazon made a decision to approach Whole Foods last month, it picked Goldman for advice.

In 2016 alone, Whole Foods had sales of $16 billion across its more than 460 stores in the United States, Canada and the United Kingdom.

The Whole Foods purchase gives Amazon hundreds of physical stores, the footprint the company knows it needs.

Whole Foods is a favorite by health nuts and the average shopper alike.

While their merger is subject to approval by Whole Foods' shareholders, regulatory approvals and other customary closing conditions, the two parties expect to close the deal during the second half of 2017.

NEW YORK (AP) — Can Amazon, the company that persuaded people to buy ever more items online, win enough of them over to having their fresh groceries arrive in an Amazon box? It has expanded from a book seller into a merchant of almost all consumer products, as well as producing videos. After the deal was announced Friday, it raised its target price for Whole Foods to $45 from $40. And it should be able to bring cost-cutting technologies, such as robots to move inventory around, while the company gets a better picture of customers by marrying data from Amazon and Whole Foods' loyalty programs.

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