Amazon has announced it will buy Whole Foods Market for $13.7bn (£10.7bn) in an all-cash deal, marking a major push into traditional grocery retailing. The acquisition gives the online giant an established network of 460 stores, including nine in the UK, and a trusted brand in organic and natural foods.
The deal sent shockwaves through the supermarket sector, with shares in Walmart falling 6%, wiping $13bn off its value. In Europe, Tesco and Metro both saw their shares drop by around 6%. Amazon's own stock rose 3.5%, pushing it close to $1,000 per share.
Analysts described the move as potentially game-changing for the grocery industry. Neil Saunders of GlobalData said: 'This deal is potentially terrifying for other grocers. Although Amazon has been a looming threat, the shadow it has cast has been pale and distant. Today that changed.'
Amazon has been expanding its grocery ambitions for years, launching its Fresh delivery service in the US a decade ago and in the UK last year through a wholesale deal with Morrisons. Buying Whole Foods will provide a network of stores for efficient home delivery and click-and-collect services.
Whole Foods co-founder and CEO John Mackey will remain in his role, and the company's headquarters will stay in Austin, Texas. Mackey said the partnership would 'maximise value for shareholders while extending our mission'. Amazon's founder Jeff Bezos said: 'Millions of people love Whole Foods because they offer the best natural and organic foods.'
