Today Amazon has announced what is by far the biggest acquisition yet. Are grand total of $13.7 billion dollars Amazon is looking to buy whole foods the increasingly popular and some would say pricey grocery chain. Just to give an impression about how Amazon wants to take this market seriously this is by far the biggest acquisition yet.
This purchase means Amazon finally cracks its way into one the hardest markets in the world, it looks to be acquiring mother 460 retail stores and will be able to be used in an assortment of operational purchases and may even feature the well-known delivery lockers that are now being increasingly used with Amazon click and collect.
Just to give an impression of how big the grocery market is in the United States and across the world is for the grocery business Is more than $600 billion a year in terms of profit. He is also a surprisingly unconcentrated market taking away Walmart which controls nearly a fifth of all food and beverage sales in the US there is no other grocery chain that has more than a 10th of the market, therefore, this means Amazon may not experience as much competition as many would expect.
Does this acquisition mean the Amazon is going to become a top 5 grocery seller
Big companies like Amazon Long wish to get into the grocery business as you can imagine across the world is a large list of companies that would also like to do this but failed in the process. However, the trend we are increasingly seeing across the world is people buying groceries on-line something that plays into Amazon’s hands perfectly as of course, it has one of the largest online selling platforms. Is for them by 2025 almost 20% of all grocery purchases may be made online this is a staggering number and is something that Amazon are really going to use their advantage.
Amazon is but one of the biggest delivery in and the whole world and that might play a key part in why they made such a large deal. However, one thing that people are forgetting is this infrastructure is not necessarily moulded to support such a large grocery delivery system. Although Amazon already sells certain food items they have never had the experience of dealing with perishable goods that would expire or spoil in a certain timescale.
One the main reasons Amazon has specifically targeted whole foods and would like to acquire it is due to the locations the whole foods stores are in, what we see is that there are many locations throughout the US in major cities.
If Amazon doesn’t use stores for grocery shopping what could they use it for
Amazon has already featured and shown what many others have seen as a cashier free convenience store last year, however, we can also see Amazon using the store locations as key delivery hubs.
However, so far Amazon is said that they will be using the stores as their experimental cashier less Technology, and have also said that there will be no jobs lost due to the acquisition. I’m going a bit off the record Here but I can’t help but feel this acquisition by Amazon is just another step in their quest to dominate every market, the issue I have that this is the more they get into the world’s industries they’re able to play much more with prices and how are you doing business essentially they can set the trend and that’s not always a good thing. I’m going to hold back on being pessimistic about how situation the moment and I’ve got him it will be interesting seeing how Amazon manages to integrate their already brilliant delivery Technology into the grocery market, however, one trying to say is we should hold back I’m praising this is such a brilliant thing just for now.