Amazon decided to lower prices at Whole Foods soon after its acquisition, forcing its rivals to compete with its prices. Now, Amazon may even offer more discounts to its Prime members, making the competition even steeper.
Amazon acquired Whole Foods for at least $13.7 billion in August, giving the retail giant access to its 473 stores in the U.K. and North America. Whole Foods allow small producers to have access to local and regional buying managers to have their products sold in stores. Although Amazon’s procurement is not as huge as many would expect, it has caused its rivals to react.
Amazon & Whole Foods merger causes upheaval
Soon after the two companies’ merger, Target and Walmart began to offer its customers to shop via Google. Even grocery chains sought to find ways to even the competition playing field by hiring services like Instacart to offer Amazon’s same-day delivery option to their customers.
“The day of the Amazon announcement, my phone was ringing off the hook…Instead of pilots and multi-year roll-outs, retailers were calling to launch immediately in as many stores as possible. Everyone in the space needs a delivery solution,” Instacart CEO Apoorva Mehta
Walmart also responded to the latest merger and issued a stipulation to its vendors to start using Google Cloud or Microsoft Azure as an alternative to AWS (Amazon Web Services).
However, the motility barely had any effects with AWS’ revenue, with a growth of at least 42 percent during the third quarter.
Amazon’s procurement of Whole Foods has affected the grocery retail industry. The retail giant plans to use Whole Foods as its link to traditional retailers, merging the companies’ various fulfillment and delivery operations with a more personal customer experience.
How do you feel about Amazon’s latest procurement and what affects do you think it will have on the grocery industry in 2018? Share your thoughts below.