As more and more people are doing their grocery shopping online, plans by Amazon to acquire the health food supermarket chain, Whole Foods suggest that buying food online is a trend which is set to expand.
Groceries were a little late to the table when it comes to buying online, but with more and more people doing their weekly food shop on the internet, to have them delivered directly to their door, Amazon are wanting to get in on the action.
Whole Foods is a health food supermarket who`s market-style layout works well in bricks and mortar, selling foods without artificial preservatives, flavours, hydrogenated fats, colours or sweeteners. The move from Amazon to acquire Whole Foods shows a high level of confidence by the internet giants in the future of online grocery selling.
The deal is set to be around US $14billion, which includes assuming the company`s net debt, and it has been stated that the headquarters will stay in Auston, Texas, and that co-founder, John Mackey will stay as CEO.
The plan is that Whole Foods will be running as an independent subsidiary of Amazon, meaning that they will keep their brand and work with the sourcing relationships that they have built up.
Online Grocery Shopping Shake-Up
Tom Caporaso who is the CEO of Clarus Commerce said that the merger of this calibre will allow Amazon Fresh to engage in a right way the market that is characterised by fractal purchases on various outlets, with different delivery options, and increase the interest in this form of online shopping.
Amazon and Whole Foods have seemingly polarised approaches to selling – Amazon focussing on competitive pricing and Whole Foods being well known for their high prices. With Amazon`s recent announcement of their discounted membership for those who receive US government welfare, this could be a valuable first step in making healthy food more accessible to the general public.
Senior analyst at IBISWorld, Madeline Hurley predicts that, "Online grocery sales are expected to continue growing as more consumers trust this channel."
This doesn`t mean however that offline grocery shopping has no value anymore. In fact, this move from Amazon may well help them to tap in the bricks and mortar market, whilst helping Whole Foods to re-define their image, becoming more accessible to more people and bringing them out of the red.
This move by Amazon, which is likely to be completed later on this year, shows that online grocery shopping is coming to the forefront in the world of e-Commerce.