Amazon buying Whole Foods, making strong move into groceries

Amazon is buying Whole Foods Market, for $42 per share in a deal that values the grocery outlet at $US13.7 billion.

Amazon has previously offered food delivery through its Fresh service for over a decade but it has not made its mark in the grocery market. Pachter said Amazon might get customers over those fears if they know the delivered items are the same as those they would find at the local store.

Investors worry that Amazon, which has already won over hordes of shoppers of clothing, electronics and many other kinds of goods, wreaking havoc on department stores and other brick-and-mortar retailers, will do the same thing with groceries.

"The conventional grocery store should feel threatened and incapable of responding", Wedbush Securities analyst Michael Pachter said.

GoPro and Pandora continued their recent spate of losses, with GoPro shares falling 3.7 percent to $7.77, and Pandora giving up 4.3 percent to close at $6.99 a share.

$3B: Drop in food and drink sales at America's brick-and-mortar stores during this year's first quarter.

For Whole Foods shareholders, the move couldn't have come at a better time. And the company has launched an offshoot chain named after its "365" private label brand, a nod to the popularity of no-frills chains that draw shoppers with low prices. In the fiscal year 2016, the Company had sales of approximately $16 billion and has more than 460 stores in the United States, Canada, and the United Kingdom.

The deal further cements Amazon's remarkable rise from an online bookseller of the 1990s to a seller of broad-based goods with mastery over supply chains and logistics, a dedicated group of subscribers through its Prime program and an increasingly honored creator of original entertainment.

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It's also been testing automation technology at a Seattle convenience store that's now open only to Amazon employees. It was recently granted a patent for technology that would block shoppers from comparing prices using their mobile devices while they are in stores. In order for Amazon to get the volume growth they are looking for, fresh foods has to be part of the equation.

Whole Foods and Amazon both have significant warehouses in Texas.

Mackey, who founded Whole Foods in 1980, serves as chief executive officer. The company is known for its organic produce and other health products. Its stock peaked in 2013 at $65.24. These tech solutions are likely to become more common this year, according to the JLL report.

As for its stock price, the grocer skyrocketed up almost 30 percent in just one day.

Whole Foods had been under pressure from activist hedge fund Jana Partners LLC prior to the announcement of Friday's deal, prompting it to overhaul its board of directors.

Instacart and Whole Foods did not immediately respond to request for comment.

"It's amusing. I was just ordering something on Amazon", said Nick Yezierski, a hotel manager who was eating breakfast outside the Whole Foods flagship store in Austin, Texas.

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