What happens to Instacart in the Amazon-Whole Foods deal?

Amazon buys the Whole Food Market company. The location at 3751 E Foothill Blvd Pasadena Calif.

Amazon buys the Whole Food Market company. The location at 3751 E Foothill Blvd Pasadena Calif.

Whole Foods' gross margins out pace Kroger, target and Wal-mart rather handily.

Wal-Mart was just one of the many retailers whose stocks were impacted by the news that Amazon is acquiring Whole Foods.

"The ramifications for all of retail are seismic - not just retailers that sell grocery, but for everyone", Chuck Grom of Gordon Haskett said. Walmart, which has the largest share of the USA grocery market, is ramping up its grocery services as a way to fuel online sales.

Amazon's shares rose 2.4 per cent to $987.71, adding $11 billion to its market capitalization, which in one sense makes the acquisition almost free for Amazon shareholders, AP points out.

The acquisition, which has not yet received approval from the shareholders of Whole Foods Market, adds a 27% premium to Thursday's closing value of its stock. Whole Foods shares rose above the offer price to close at $42.68. On Friday, WalMart announced it is buying men's online clothing retailer Bonobos for $310 million.

Amazon's purchase of Whole Foods is a wakeup call for all grocery stores, says a Purdue University retail management expert."It is hard to overstate the impact that this is going to have in the grocery industry", says Richard Feinberg, professor of consumer science. This will allow Whole Foods to do what it does but better and more profitable. You point out that 24 percent of millennials bought something from Whole Foods a year ago. And while the deal sent a number of food-related retailers lower, I see Costco Wholesale Corporation (NASDAQ:COST) as the biggest potential victim.

"Make no mistake, Walmart under no circumstances can lose the grocery wars to Amazon", said Brittain Ladd, a strategy and supply chain consultant who formerly worked with Amazon on its grocery business.

"Amazon can now answer the question, What are we having for dinner", he says.

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Amazon didn't detail its plans for the chain, but the deal rocked the retail sector.

Amazon would also look to change Whole Foods' inventory, introducing its own private-label products to replace items deemed too expensive to have mass appeal, the person with knowledge of the matter said.

"They're doing an wonderful job and we want that to continue", Amazon founder and CEO Jeff Bezos said. John Mackey will remain as CEO of Whole Foods Market and Whole Foods Market's headquarters will stay in Austin, Texas.

Whole Foods last month shook up its board of directors under pressure from activist investor hedge fund Jana Partners.

"I think this acquisition is a concern", he said. The deal is estimated to be worth almost $13.7 billion, at $42 per share.

Whole Foods is a favorite by health nuts and the average shopper alike.

Amazon's resources and online channel will make it "a larger threat in the food retailing market", she told the E-Commerce Times. It has expanded from a book seller into a merchant of almost all consumer products, as well as producing videos. According to multiple reports, Whole Foods also invested in Instacart.

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