Keep the premium fresh foods, lose the high prices.
That’s the vision Amazon has for Whole Foods now that the e-commerce giant wants to acquire the organic grocer for some $13.7 billion in an all-cash transaction!
While we wait for both federal regulators and shareholders to approve the deal, here’s some more news to chew on…
Read more: Amazon ready to enter the supermarket fray
The end of high prices at Whole Foods?
For years now, the name Whole Foods has been synonymous with high-margin health food. But the era of ultra-high prices may be coming to an end.
A source familiar with the matter say Amazon may roll out some (possibly extreme) cost-cutting measures to lower prices across the board at Whole Foods. Bloomberg says the source asked not to be named because the info remains confidential at this time.
Whole Foods has made some overtures to lower prices over the years, such as launching a handful of smaller stores stocked with mostly store brands under the “365 by Whole Foods Market” banner. But by and large, the retailer has retained its “Whole Paycheck” image and nickname — and sales have suffered because of it.
Yet it could be the dawn of a new day at the Austin, Texas-based grocer.
First up, Amazon may be considering a reduction in headcount at Whole Foods locations to save money. In fact, cashiers (and checkout lanes) may go the way of the dodo entirely if Amazon uses the same disruptive retail technology being tested at a Seattle convenience store.
Using computer vision, sensor fusion, and deep learning, the Amazon Go beta technology can automatically detect when you take something off the shelf and charge it to your Amazon account. That leaves you free to walk out with your items without ever having to wait in a checkout lane!
Clearly, this is not word that Amazon wants out on the street just yet. It’s worth noting that Amazon spokesman Drew Herdener told Bloomberg there are “no plans to use no-checkout technology to automate the jobs of cashiers at Whole Foods and no job reductions are planned.”
Another potential shakeup said to be coming is in inventory management. Amazon may change the inventory at Whole Foods as part of broad effort to lower prices. Specifically, that means more of Amazon’s own private-label grocery products in the grocery aisle, according to Bloomberg.
Guess we’ll have to wait and see what official announcements surface in the weeks to come!
Listen: Clark discusses the Whole Foods-Amazon merger on The Clark Howard Show Podcast
More M&As ahead?
Meanwhile, Amazon’s proposed takeover of Whole Foods has spurred talk of other mergers and acquisition in the grocery sector.
Bernstein Research is out with a new report suggesting a merger between the U.S. operations of Dutch retailer Ahold Delhaize and Kroger may be coming.
Ahold Delhaize owns Food Lion, Stop & Shop, Hannaford and Martin’s Food Markets, among other domestic grocery brands.
Whatever happens this much is sure: Buckle your seat belts because it’s going to be a wild ride in retail at the grocery store!