Lucy: Well, we certainly weren’t expecting to hear this morning that Amazon plans to acquire Whole Foods for $13.7B. While both companies aren’t headquartered here — check out Austin Inno for the deal’s impact on Whole Foods’ home base — the deal is certainly going to have an impact here and everywhere else across the country, if only because of their collective reach.
Dylan: But there’s definitely a lot more going on here than the fact that Whole Foods has 30 locations in Massachusetts. For one, the deal’s announcement has competitors freaking out. The stock prices for a number of grocery companies — including Ahold Delhaize, which owns Stop & Shop, Peapod and Hannaford — have gone tumbling. Right now, Ahold’s stock is down by nearly 10%. Walmart and Target also took significant hits.
As Recode smartly pointed out, the deal won’t just give Amazon control of a major grocery chain, it will also give the ecommerce giant access to “more than 400 stores to use as delivery hubs.” This would give a substantial boost to Amazon’s services for one- and two-hour Prime Now delivery, as well as its Fresh grocery delivery service, both of which are available in Boston. If AmazonFresh could cut its annual membership even further, it would prompt me to consider dropping Peapod. This would also pose a threat to other grocery delivery services, like Instacart and Boston-based CartFresh.
Lucy: If the deal closes and isn’t killed by regulators, a couple of Boston-based entities could win big. State Street and Fidelity both have a substantial amount of shares in Whole Foods, as BBJ reported. |
