The stature and market-share of Amazon in e-tail or cloud market is prodigious. But building a retail footprint comes out of the acquisition syllabus.
Amazon lately confounded with its latest arm and a leg acquisition of Whole Foods Market for $13.7 billion. The largest deal in Amazon’s history is a strategic reflection of both the sheer magnitude of the grocery business — about $800 billion in annual spending in the United States — and a desire to turn Amazon into a more frequent shopping habit by becoming a bigger player in food and beverages.
No layoffs are expected to result from the acquisition, according to a source familiar with Amazon’s plans. That could be a relief to Whole Foods employees who might look at the deal with the tech giant and envision their jobs being replaced by robots. That doesn’t appear to be the case, at least not in the foreseeable future.
“Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,” said Amazon CEO Jeff Bezos in a news release announcing the acquisition agreement. “Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades – they’re doing an amazing job and we want that to continue.”
The announcement adds, “Whole Foods Market will continue to operate stores under the Whole Foods Market brand and source from trusted vendors and partners around the world. John Mackey will remain as CEO of Whole Foods Market and Whole Foods Market’s headquarters will stay in Austin, Texas.”
Amazon referred to Whole Foods internally by the code-name “Walnut” to help maintain secrecy during the negotiations, according to financing paperwork filed with the Securities and Exchange Commission.
The deal, expected to close in the second half of this year, is a shocker to many in the retail business. In addition to acquiring physical stores, Amazon just boosted its headcount by a whopping 67,000 employees. At the end of the first quarter, Amazon employed 351,000 employees.
In 2009, Amazon paid a $1.2 billion for online retailer Zappos.