Amazon plans cuts to make Whole Foods competitive with Walmart, reports say

Amazon plans cuts to make Whole Foods competitive with Walmart, reports say

He wrote in a report that “another bid cannot be ruled out” because other big retailers may want to do anything they can to prevent Amazon from getting even more powerful.

Say “Whole Foods” and some envision a gastronomic nirvana, overflowing with a healthy bounty worth a premium price. The company has also made it increasingly easy for its users to go into just about any store, scan a barcode and compare that retailer’s prices to Amazon’s.

TheStreet visited three grocery locations in New York’s financial district, and of those three, Whole Foods noticeably thrived. Cowen & Co. calls the $1.3 trillion US grocery market “Amazon’s biggest potential source of revenue upside”.

Grubhub, based in Chicago’s Loop, provides an online and mobile platform for restaurant pick-up and delivery orders. The deal gives Amazon an opportunity to leverage Whole Foods’ 460 stores across the USA, United Kingdom and Canada, 87,000 employees and its solid reputation.

Amazon would also look to change Whole Foods’ inventory, introducing its own private-label products to replace items deemed too expensive to have mass appeal, the person with knowledge of the matter said. Short reasons that this theoretically means that such a company could pay more for Whole Foods than Amazon could.

Amazon said Whole Foods would continue to operate its stores under the same brand, source and use the same vendors, and John Mackey will remain its CEO.

As mainstream grocery stores beef up their organic food offerings, Whole Foods has struggled to compete on price – an issue Amazon is in a *prime* position to fix.

But he said he thought Amazon would be able to help Whole Foods more quickly realize the changes it has already been pursuing, such as a loyalty program and its cost-cutting efforts.

Technology is just one way Amazon stands to change Whole Foods and its culture, though.

“If you think about inventory management, boy, who better than Amazon to attack that problem?” she asked.

He praised Amazon’s technology and long-term focus without indicating how they’ll apply to Whole Foods. Over time, Khan expects Amazon gain a number of benefits from the deal including synergies, competitive response to Walmart, valuable data on local buying behavior, expanded reach and increase in customer wallet share.

“After adjusting for Australia’s population, the Whole Foods acquisition is the equivalent of a 34 store, $1.5 billion turnover business in Australia”.

A representative for Whole Foods confirmed that Amazon CEO Jeff Bezos was at the meeting. “The Whole Foods Market stores and our brands, they’re gonna stay all the quality standards we have, the integrity we have behind our products and our brand, those are gonna be intact”. Whole Foods already has a lot of in-store dining and lots of prepared foods.