Amazon buys Whole Foods Market for £10.7 billion

June 19, 2017 | 10:43

Tags: #bricks-and-mortar #e-tailer #etailer #jeff-bezos #shopping

Companies: #amazon

Web retail and cloud computing behemoth Amazon is getting into high-street grocery retailing in a major way, spending a whopping $13.7 billion (around £10.7 billion) to acquire the US Whole Foods Market chain.

While Amazon got its start by launching an e-tail service which has been blamed for the closure of numerous high-street bookstores, the company quickly pivoted: what had started as an online bookshop soon branched out into selling absolutely everything the company could get its hands on, then via the Amazon Marketplace into everything anybody could get their hands on. Following its explosive growth Amazon came to the conclusion that others might pay to use its vast server infrastructure, and thus was born a range of cloud computing services from Amazon Web Services (AWS) to Elastic Cloud Compute (EC²) and the Amazon Simple Storage Service (S3). In 2014 the company even made a splash in the game streaming market, acquiring video streaming service Twitch for $970 million after out-bidding rival Google.

More recently, Amazon has been dipping its toes into the bricks-and-mortar retail market - sweet irony, given its origins and contribution to high-street shop closures - with high-tech grocery shops which track purchases as customers pick items from shelves and place them in their baskets. Now, though, it has made one of its biggest acquisitions in history by picking up US food chain Whole Foods Market for $13.7 billion (around £10.7 billion) including net debt.

'Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,' claimed Jeff Bezos, Amazon founder and chief executive, of the deal. 'Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades – they’re doing an amazing job and we want that to continue.'

Under Amazon ownership, Whole Foods Market is to continue under its existing brand and with its existing supply chain. The company is expected, however, to form a central part of Amazon's growth in the fresh food and groceries market, following the launch of the Amazon Fresh Pickup grocery collection service in two Seattle trial areas last month.
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