Whole Foods CEO literally 'dreamed' about Amazon merger

Tomas Mccoy
June 22, 2017

Jeffrey Bezos, founder and CEO of Amazon.com said "Whole Foods Market has been satisfying; delighting and nourishing customers for almost four decades - they're doing an awesome job and we want that to continue".

Mackey spoke at a town hall with Whole Foods employees after the deal was announced late last week. At the time, Amazon wasn't certain Whole Foods had enough stores to move groceries on the scale the e-commerce giant wanted.

Jeff Wilke, Amazon's CEO of Worldwide Consumer who was on hand at the town hall last week, affirmed that Amazon did not want Whole Foods to change its standards on food quality, according to the transcript.

"Every grocery store out there now is having a conversation about how much they can afford to spend to keep Amazon out of the space", said Brian Culpepper, a portfolio manager at James Advantage funds. By acquiring Whole Foods, Amazon now owns a familiar name with a lot of value in the market. The latter in particular, which is the largest membership-only warehouse club in the USA, could be hurt considerably by the Amazon-Whole Foods deal.

For now, Whole Foods seems happy with the deal. That's a blow to rivals like Target and Wal-Mart, which boasted that physical as one thing they had over Amazon.

Even so, Mackey used the words "change" and "evolve" often throughout the talk, and while he was a bit vague on the details, here's how he sees Amazon affecting Whole Foods for shoppers and employees alike.

Mr. Mackey likened Friday's deal announcement to an engagement, and "like an old traditional marriage, where there are all kinds of rules and chaperones, we can't consummate the marriage, until we're actually officially hooked up".

"One of the things they do better than us, they are more customer-centric than we are".

Some Wall Street analysts are starting to wonder whether another retailer will come up with a higher offer and start a bidding war for the Whole Foods grocery chain. "This is not a Tinder relationship.I got a feeling I'm off script".

In his address, Mackey hinted at his answer to one of the big questions hanging over the Amazon-Whole Foods merger.

The Whole Foods chief said Amazon's technology will help the grocer transform from "class dunce" into "valedictorian".

The transaction isn't expected to close until the second half of the year, and Whole Foods shares soared 29 percent to $42.68 Friday - more than the $42 deal price, indicating investors anticipate another bidder could emerge.

Amazon is known for driving sales at the expense of profits, Stifel analyst Mark S. Astrachan noted, saying the company will likely maintain that approach as it looks to build market share in groceries. In December, the tech giant unveiled plans for futuristic grocery stores that don't staff cashiers.

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