Amazon is taking a plunge head first into the grocery industry with the surprise announcement that it plans to acquire Whole Foods Market.
Amazon ready to enter the supermarket fray
On June 16, Amazon shocked the grocery industry with a press release announcing a definitive agreement to pay cash for Whole Foods in a deal valued at some $13.7 billion.
Jeff Bezos & Co. will pay $42 per share for the legacy organic supermarket — pending approval by both regulators and Whole Foods shareholders.
The deal is expected to close during the second half of 2017.
The organic grocer will continue to operate under the banner it created in 1978 when the first Whole Foods Market opened in Austin, Texas.
Amazon has long sold some dry goods online, but this marks a major push for the e-commerce giant into the physical retailing of groceries.
The shocking announcement adds to an already volatile sector that’s seen hard discounters like Aldi challenge both Walmart and traditional grocery players.
Earlier this year, Walmart fired back at Aldi with new lower prices.
And just this week, another cheap European grocer entered the U.S. market. Lidl — Aldi’s longtime competitor — opened its first 10 stores in the United States on June 15. Eighty more U.S. stores are on tap for Lidl over the next 12 months.
All the disruption in the supermarket field is good news for consumers. When supermarket giants battle, you win with lower prices!
Read more: Here’s a first look at Lidl’s prices