Comparison Of Amazon And Whole Foods

When I think about one company buying another company I think of the two businesses having something in common. However, the more I think about it, I realize that this is not always the case. Sometimes it will benefit both companies to come together, even if they are opposites. That is the case when Amazon decided to buy Whole Foods. Amazon is the largest online retailer in the world today, in terms of revenue and market capitalization. The website started out as a bookstore, but quickly began to sell video and music download/streaming, software, video games, electronics, apparel, furniture, toys, and jewelry. On the other hand, Whole Foods was a large supermarket chain that sold organic food products to the public. The chain had stores within

Afterall, Whole Foods had roughly 431 stores across three different countries, and was bringing in an average of $675 billion a year in the United States alone. However, even though it seemed like the grocery chain was doing well, they were beginning to suffer in recent years before the acquisition took place. Amazon swooped in and bought Whole Foods at a time where the grocery chain was struggling with slowing sales growth due to increased competition. In April 2017, Whole Foods reported their sixth consecutive quarter of declining sales and announced the closing of nine stores in seven different states. Less people were shopping at Whole Foods Markets because other grocery chains offered the same products for cheaper prices. Amazon’s purchase of Whole Foods kept the store alive. After the news that Whole Foods would be owned by Amazon, Whole Foods stock prices rose drastically. John Mackey, CEO of Whole Foods, later said that the purchase did save Whole Foods from failing, and “from its own reputation.” Because people believed Whole Foods to be a high priced market for the wealthy, they didn’t want to shop there because there were other, less expensive options out in the market. However, because Amazon began to immediately lower prices, it gave them a competing edge in the market. The purchase not only helped Amazon, but Whole Foods as

Purchasing items online has become a major threat to companies who have long been selling proucts in physical stores. However, online stores, including Amazon, were never a real threat to grocery markets. This is due to the same reason why Amazon decided to make the purchase in the first place, consumers have favored to shop for their grocery products in person. But thanks to the purchase of Whole Foods and Amazon’s lowering of prices for higher quality goods, Whole Foods/Amazon has become a major threat to grocery markets. In June of 2017, the six largest food retailers announced a combine lost of $12 billion in value after Amazon announced they were going to lower Whole Foods prices. The new Amazon owned Whole Foods now proves a legitimate threat to supermarkets, a threat supermarkets never face