Amazon Buys Whole Foods

Yesterday the internet was abuzz with the ‘news’ that Amazon was about to buy Slack for some $9 Billion dollars. While that may still happen, it was announced today that Amazon is absolutely buying (or I suppose I should say offering to buy) Whole Foods for some $13.7B – all cash of course.

Bezos isn’t doing this to because Amazon and Blue Origin have switched to all organic cafeterias or because he is a vegan. No, he’s doing it as a part of his long-term strategy to take over the world. Malls are vacant and closing because they can’t compete with online stores with free shipping, free returns and a highly automated (or otherwise dirt cheap) infrastructure and delivery process. Amazon has done three things in this space before, first are their bookstores they’ve slowly opened. From those they’ve learned how to manage physical stores. They also have Amazon fresh their online delivery system. Finally, they have the Amazon delivery network in large cities/burbs that can deliver nearly anything in an hour. Now after the acquisition of Whole Foods, they’ll have hundreds of locations from which to deploy their delivery army bringing organic groceries to your door in minutes.

 

TLDR: In about 6 months Amazon & Bezos will be knocking on more customers doors and tearing down grocery stores.

 

Aside:
Today Kroger’s announced lower store YoY sales for the first time practically ever and that’s probably because of online grocery shopping. Their stock dropped something like 20% I can’t imagine it’s going to regain following this news.