These Reactions To Amazon's Acquisition Of Whole Foods Say It All

Amazon Gobbles Up Whole Foods For $13.7 Billion

In a move that will reshape the supermarket business, the online retailer Amazon has announced it's buying the high-end food chain Whole Foods in a deal worth $13.7 billion.

"Amazon didn't just buy a grocery retailer".

In Whole Foods, Amazon is acquiring a company that has recently come under pressure from investors for its lagging performance. In fact, Amazon spokesman said that they do not plan on using Amazon Go in Whole Foods and no cashiers or other layoffs will happen with the acquisition, according to The New York Times report.

SuperValu, which has a network of 2,000 grocery stores across the country, took one of the biggest hits.

The Dow Jones Jones Industrial Average gained 24.38 (+0.11 percent) to finish at 21,384.28. Whole Foods traded in the mid-$30 range for May and the first part of June.

The move weighed on Canadian grocery retailers as shares of Loblaw (TSX:L), Empire (TSX:EMP.A), Metro (TSX:MRU) and George Weston (TSX:WN) all lost ground. Walmart, which has the largest share of the USA food market, has been working on lowering prices, while Target has been struggling to turn around its grocery business.

Small-company stocks fell more than the rest of the market. On Friday it soared $9.62, or 29 percent, to $42.68, above the $42 a share Amazon agreed to pay.

Amazon has also been expanding into brick-and-mortar stores with the launch of AmazonGo, a grocery store where customers don't have to wait in checkout lines.

Whole Foods, for its part, has been around for almost 40 years ― it was founded in 1978 ― and despite criticism over its high price tags, it remains a strong brand name, and one which you could easily imagine Bezos and Amazon doing a lot with.

After the announcement, major grocery store stocks have tumbled sharply in early morning trading, most likely due to the fear of the Seattle-based giant's expansion plans.

"Dominant players like Wal-Mart, Kroger, Costco, and Target now have to look over their shoulders at the Amazon train coming down the tracks", said Charlie O'Shea, lead retail analyst at Moody's Investors Service.

Whole Foods, founded in 1978, saw its stock peak in 2013 at $65.24.

Whole Foods Market co-founder and CEO John Mackey said the partnership presented an "opportunity to maximize value" for shareholders.

Completion of the transaction is subject to approval by Whole Foods Market's shareholders, regulatory approvals and other customary closing conditions.

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