Now That Amazon Bought Whole Foods, What's next for Shopping?

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On Friday Amazon announced its intention to acquire Whole Foods Market, a supermarket chain with more than 460 stores across the US, Canada and the United Kingdom, for $13.7 billion.

Amazon plans to keep the high standards at Whole Foods, Mackey said, adding, "They're not stupid enough to go change that". Chief Executive Officer John Mackey, who agreed to sell the company to Amazon.com Inc. last week, said he was first set up with the e-commerce giant on a "blind date" about six weeks ago and fell in love after conversing for hours. The reports of Amazon's massive purchase of the upscale grocery store chain seemed to come out of nowhere, but perhaps the acquisition is not as surprising as originally thought.

Jeff Wilke, Amazon's CEO of Worldwide Consumer who was on hand at the town hall last week, affirmed that Amazon did not want Whole Foods to change its standards on food quality, according to the transcript. Incubating smaller, local brands has been part of the Whole Foods cachet for years, and she wonders if that culture can survive inside the embrace of a retail powerhouse. The Whole Foods locations could lower Amazon's costs by reducing the need for refrigerated trucks to deliver grocery orders.

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First, not only will it put pressure on large retailers with exposure to the grocery market, it will put pressure on two of Amazon's biggest competitors, Wal-Mart and Costco.

"We're gonna evolve", Mackey said. But like an old traditional marriage, where there are all kinds of rules and chaperones, we can't consummate the marriage, (LAUGHTER) until we're actually officially hooked up. I think we coulda talked for 10 hours. "Instead, what we may see is an increased use of technology in the supermarket to help us make our shopping decisions and also how we pay for things".

"This is not a Tinder relationship", he clarified.

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Milstein Properties' Michael Milstein, whose company has Whole Foods as a tenant at 1551 Third Avenue, said he sees three likely motivations for Amazon's deal, with the company possibly looking to implement one or some combination of the three.

It's also important to note that even if the deal goes through, the Amazon and Whole Foods combo will represent about 3.5% of grocery spending in the U.S. So it's not yet as groundbreaking as it sounds.

Despite that possibility, Amazon shares also gained as Wall Street analysts lauded the proposed $42-per-share deal and bet that the company would prevail in any bidding battle. Industry observers have said that Amazon may add a selection of discounted, non-organic food to distance the chain from its "Whole Paycheck" nickname.

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Walmart is the nation's largest seller of groceries with category sales of $170 billion past year, and retail giant has found that the category is key to driving store visits and customer loyalty. Whole Foods had been working to get better at data collection with the rollout of a loyalty program, and Amazon is expected to give those efforts a significant boost.

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