Amazon’s plans to buy the Whole Foods Grocery chain for $13.7 billion got a step closer this week when shareholders of the Whole Foods supermarket voted in favour of the deal. This is not a surprise as it was widely anticipated that the shareholders would vote this way.
The merger of Amazon and Whole Foods will see the Whole Foods group of stores benefit from Amazon’s delivery, online and logistics expertise. For Amazon, it gives them an instant entry into the food industry, an area that they have been experimenting in for years. It will also crucially give Amazon an instant bricks-and-mortar network thanks to Whole Foods 470 stores across the USA, Canada and the UK.
Whilst we are all shopping more and more online, this matters because customers still like to shop in person too says Miriam Burt, a retail analyst at Gartner, the leading tech research company.
“For almost all categories of products besides books, music and videos, our research is telling us that customers still prefer to go into the store and interact with the products,” she said.
Will The Acquisition Of Whole Foods By Amazon Be A Threat To Restaurants?
Not everyone sees Amazon’s purchase of Whole Foods as a positive though. Ecommerce giant Amazon’s acquisition of Whole Foods is a ‘threat to everyone’, surprisingly even restaurants says David Henkes, principal at Technomic in an email to CNBC.
“In the short term, there’s probably not a major impact on restaurants,” David Henkes, principal at Technomic, told CNBC via email. “Certainly Amazon is focused on building supply chain solutions for restaurants, including fresh items, grocery and non foods, but that’s been going on for a while.”
Henkes goes on to say that over the longer term, Amazon poses a much bigger threat. This is because of the expansive data collection abilities that it has as well as its online convenience, causing the closure of bricks and mortar stores leading to a drag on restaurant sales in certain areas. Amazon’s commitment to data gathering has helped the company learn more about its customers something that can be utilised to place themselves easily ahead of any competitor.
Amazon “measures everything” and uses that information to optimize every aspect of its business, Eli Portnoy, CEO of Sense360 and a former Amazon employee, told CNBC.
“I think restaurants have been immune to this because they never had a competitor who could do this,” Portnoy said. “Now they do. Now they have Amazon that is going to come in and measure every single transaction and measure the impact of it and really think holistically, the same way they do on Amazon.com and across their other businesses.”
He said Amazon is “going to make very smart decisions because they are all going to be backed by data.”