Amazon’s Acquisition of Whole Foods Can Disrupt the Retail Sector

The consumer retail sector in North America has some of the leading multinational brands competing for supremacy. However the story is not that simple, modern companies are becoming more diverse in nature. From production to retailing, some of the new generation companies are keen on controlling the entire process in order to tap into every single business opportunity. Jeff Bezos’s Amazon can serve as a leading example of such contemporary business models. Today, enterprises are not confined to any particular vertical and are capable of quickly adapting to market conditions i.e., selling what could be sold and is in demand.

It is no secret that Amazon is one of the largest e-commerce players in the world. While the company already has a range of electronic products sold under the brand name, it now plans to explore into other large-scale retailing segments. Amazon has recently revealed its plans to acquire Whole Foods Market Inc., which is considered to be a huge step towards its brick and mortar business ambitions. If the two companies come to any agreement, it will allow Amazon to access Whole Foods’ vast customer data and all its retail outlets, giving it a strong lift in brick and mortar business. Nevertheless, a certain antitrust law inference looms over that might apparently rebuke Bezos’ plan. In this case, a call for an antitrust scrutiny is very much comprehensible, as the deal can potentially kill some of the other players in the market that are already facing the heat.

The deal will certainly allow both the companies to make drastic changes, which will also influence the consumers’ purchasing pattern and hence poses a threat to other retailing companies such Walmart and United Retail Group, Inc. Moreover, the mega $13.7 billion acquisition, which is yet to reach any concrete base has already rattled investors. Reportedly, a number of stakeholders are pulling out from competing companies, leading to huge losses for many of underperforming food and retail stocks on the S&P. Blue Apron Inc- an ingredient-and-recipe subscription mail service providers is reportedly planning to slash the stock price for its forthcoming I.P.O, which is primarily linked with the potential Amazon-Whole Food deal. Companies such as the Blue Apron is likely to be at receiving end if the e-commerce giant is successful in acquiring Whole Food.

Whole Foods’ fresh inventory and organic products will boost Amazon’ food delivery service unit AmazonFresh. The 400 Whole Foods locations can serve as delivery hubs for Amazon, which might potentially become an existential concern for other players in the market.

Malar kodi

Malarkodi M comes with a vast experience in food & beverage market research, with a special focus on emerging trends in the ingredients sector. A well-known figure in the global F&B sector, Malarkodi M has helped both large-scale and small-scale food & beverage companies develop business strategies through her research and consulting expertise. Malarkodi has been at the forefront of discussions on the evolving F&B ingredients landscape and has voiced her opinions at international forums. Her international presentations at the ‘Agrochemical Business Strategies and Opportunities’ at Berlin (2014) and Vitafoods - Asia-Pacific Heart Health Functional Food Market, Hong Kong (2016) was widely appreciated, serving as a strong foundation for further discussion on emerging trends. Malarkodi’s insights are regularly covered by reputed food & beverage journals, including Food Navigator, Nutraingredients-asia and DairyReporter.