Amazon has announced the purchase of US supermarket chain Whole Foods, in a deal worth almost NZD $19 billion. The move, announced last Friday (US time), would see Amazon take their largest steps to date into the bricks-and-mortar retail realm. The physical footprint of Whole Foods is relatively small, with only 400 stores across the US, but there were plans to triple that number before the Amazon purchase was announced.
"Amazon clearly wants to be in grocery, clearly believes a physical presence gives them an advantage," said Michael Pachter, an analyst at Wedbush Securities. "I assume the physical presence gives them the ability to distribute other products more locally. So theoretically you could get 5-minute delivery."
The aggressive expansion of Amazon into the grocery market, combined with the e-commerce giant’s flagship AmazonGo cashierless store, could spell bad news for the supermarket workforce. Other retailers like Target and Kroger may be forced to follow suit, which could potentially result in the loss of thousands of jobs.