NEW YORK (KDKA) — Amazon is best known as a giant on-line retailer that ships all kinds of products everywhere, while Whole Foods is a much smaller select high end grocery chain that specializes in organic foods.
“Amazon and Whole Foods are like a David and Goliath, with Amazon being a $475 billion Goliath,” says Fort Pitt Capital Group’s senior analyst, Kim Caughey Forrest.
But now Amazon is purchasing Whole Foods, a shock to many analysts like Forrest.
“I am very surprised that Amazon is buying Whole Foods, but not that surprised that Amazon is buying a food retailer,” Forrest told KDKA money editor Jon Delano on Friday.
Amazon is paying $13.4 billion for the acquisition of Whole Foods, a hefty price but worth it for the giant online retailer that wants to get into the grocery business to better compete against Walmart.
“It really fits in with their strategy of delivery to the home, and that’s something they really needed — fresh foods.”
Point Park University business professor Elaine Luther believes the acquisition will be good for consumers.
“I would hope that is that they just make their good quality products accessible to more people,” says Luther.
Amazon founder Jeff Bezos, the third wealthiest man in the world, suggested in a statement no real changes to Whole Foods, noting, “Millions of people love Whole Foods because they offer the best natural and organic foods.”
“They’re doing an amazing job and we want that to continue,” says Bezos.
But watch Amazon to focus its speed, innovation, and convenience on Whole Foods.
“You could order during the day, and pick up on the way home.”
That’s what younger shoppers want.
“Millennials don’t like shopping, and when they do shop they want fast in and fast out,” says Forrest.
Forrest says this positions Amazon to compete against Walmart’s food services.
“It brings very urban settings for its stores and, to be honest, the more well-heeled shoppers. So that is what they are delivering to Amazon, and that I think is a perfect combination for Amazon and the Prime shopper.”
So what does Amazon’s acquisition of Whole Foods mean for whole food customers?
Does it mean faster and better delivery of online orders?
Will more amazon products be located in stores like this?
A spokesperson for Whole Foods would not speculate, except to say the Whole Foods quality standards will not suffer at all.
Will customers see a difference?
“In the short term, no. In the long term, perhaps,” says Forrest.
Luther is optimistic.
“They might make it easier for you to get exactly what you want,” adds Luther.
“I don’t think anybody should buy Whole Foods,” says customer Helen Lazar of the Northside. “Because the products I’ve eaten and had for years I like.”
But other customers like the idea.
“Probably Amazon has the distribution skills that Whole Foods needed all along. I think it’s a great match,” says Steve Hough of Shadyside.