Amazon Just Purchased Whole Foods For A Shocking Amount

$13.4 billion—that’s the price Amazon paid to buy up Whole Foods.

The purchase reflects the huge ambitions of Jeff Bezos—the online giant’s CEO—who recently took to Twitter asking how he should spend his $18 billion fortune in philanthropy:

Of course, Jeff’s philanthropic ambitions only exist thanks to his entrepreneurial ambitions, which manifested most successfully in the exponential growth of Amazon.

Purchasing Whole Foods represents a critical step in the company’s strategy, namely in establishing a more physical presence instead of being so exclusively online.

The $13.4 billion buyout effectively turns every one of the company’s 460 grocery store locations into physical outposts for Amazon.

Recently, the company began experimenting with in-person retail using drive-through stores and their streamlined “Amazon Go” convenience shops which eliminate the needs for cashiers.

Of course, there are even greater strategic tactics that Amazon could deploy now that it own Whole Foods.

According to the New York Times:

“Analysts speculated that Amazon could use its $99-a-year Prime membership service, which gives customers free, two-day shipping and other benefits, to offer Whole Foods customers a better price on groceries, as it does for books in its bookstores. The stores could also serve as an advertisement to get more customers to sign up for Prime; in September the financial firm Cowen & Company estimated that Prime had 49 million subscribers in the United States, representing about 44 percent of households.”

Amazon Prime’s 2-day shipping has been a massive incentive for joining the annual membership, but the company’s striving for even more.

Ideally, Bezos would like an ever-increasing number of local “outposts” so that online orders can be delivered within 2 hours.

With the Whole Foods purchase, it’s now many steps closer to achieving this—at least when it comes to grocery items.

Responses on social media have been diverse, though many couldn’t help but take a jab at the grocery store chain’s notoriously high prices:

Sources:
New York Times

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