Is Whole Foods owned by Amazon? The following article is a written adaptation of an episode of Thrilling Tales of Modern Capitalism, Slate’s podcast about companies in the news and how they got there.
In 2017, Amazon entered the grocery business by tossing Whole Foods in its shopping cart. Amazon spent more than $13 billion to buy this 40-year-old supermarket chain known for its organic merchandise and, at times, its sky-high prices. In the grocery world, the purchase was a cataclysmic event. “The acquisition of Whole Foods was the alarm bell that started all these multibillion-dollar investments in digital grocery capabilities,” says Jon Springer, executive editor of the trade publication Winsight Grocery Business. “It was like, Oh, my God, we’ve got to do something about this.”
Is Whole Foods owned by Amazon?
About two months ago Amazon opened its first “Just Walk Out” Whole Foods store in Washington, D.C., replete with hundreds of cameras and surveillance technology that track everything shoppers put in their baskets and charge them after they leave. Like the Amazon Fresh dash carts that preceded this cashier-less store of the future, Amazon’s technological experimentation at Whole Foods drew plenty of media attention.
But Whole Foods has changed a lot more than its checkout systems over the past decade. Even before Amazon took over Whole Foods in 2017, the grocer was making moves to centralize its purchasing and bring down prices on its in-house brands at the expense of the local suppliers and regional autonomy that set the chain apart.
Amazon’s acquisition cemented this strategy and ushered in more cost cutting, especially on the backs of workers. While Whole Foods still talks a big game about supporting local businesses and their workers, both groups have been shunted as the chain seeks to compete with dominant retailers. These business decisions exacerbate inequality by squeezing workers and cutting off an avenue for small food businesses to grow into viable larger competitors.
Before selling to Amazon, Whole Foods was a bit of a natural grocery monopolist itself. Through the 1990s and 2000s, Whole Foods bought up at least nine regional natural food chains including Fresh Fields Markets, Bread of Life, Fresh & Wild, and Wild Oats (for which it faced antitrust scrutiny).
As the leading natural foods supermarket, Whole Foods became a key launching pad for innovative, regional, and more sustainable food brands. Brands such as Justin’s nut butters, Siggi’s yogurt, and Beyond Meat all got their start at Whole Foods before going on to compete with (or be acquired by) dominant food companies. “Before, Whole Foods was pretty much the place you launched brands if you were on a path to success,” says Zach DeAngelo, co-founder of Rodeo CPG, which supports food business startups. “That happens a lot less now for new brands.”
Whole Foods traces its roots back to Texas.
John Mackey and Renee Lawson launched the business that would become Whole Foods Market in 1978 in Austin.
According to the company’s website, Whole Foods grew out of the 1980 merger of Mackey’s and Lawson’s SaferWay store with Craig Weller’s and Mark Skiles’ Clarksville Natural Grocery.
Whole Foods Market grew rapidly.
With its focus on fresh and organic options, the grocery business took off in the 1980s and underwent rapid expansion that would see Whole Foods Markets open across the United States.
Whole Foods says that at the time of the company’s founding, “there were less than half a dozen natural food supermarkets in the United States.”
Whole Foods: Inflation takes bite out of Amazon owned grocery store
The Amazon-owned UK division of Whole Foods has seen a rapid decline in earnings for the year as soaring inflation makes Brits hesitant to fork out on its pricey goods.
Whole Foods UK reported operating losses of £26.9m up from £17.2m the prior year and its sales also fell to £91.6m down from £94.3m.
Amazon took up its first major forage into the grocery market when it bought Whole Foods in for $13.7bn (£10.7bn). In the UK it trades from seven sites solely across London.
As the capital grapples with soaring supermarket prices, it appears London’s health conscious have struggled to justify spending on its naturally-sourced goods. Whole Foods charges £3.99 for eggs and its Seggiano Organic Fusilli Pasta costs £5.
Its failing profits also bruise Amazon, which is still trying to carve out a top spot in the grocery market.
Last year, it halted the roll out of its cash-free Amazon Go sites. It had originally planned to launch hundreds of the sites across the UK but it abandoned the project after opening 20 stores due to poor sales performance.
Amazon, which revolutionised online shopping, has struggled to mirror the success of its online website with its physical stores.
Amazon also closed all 68 of its brick-and-mortar bookstores in the UK and US in March last year.
However bosses at Amazon still appear to be keen to hold space in the grocery sector – with it rumoured to be eyeing a takeover of Ocado’s technology business.
The robotics and supermarket business has struggled in recent years as shoppers drifted away from online grocery shopping following the end of social-distancing laws post pandemic.
Cautionary Statement Regarding Amazon Forward-Looking Statements
Amazon’s statements related to the proposed merger with Whole Foods Market contain forward-looking statements, including statements regarding expected benefits of the merger, the timing of the transaction, and financing of the transaction. Actual results could differ materially from those projected or forecast in the forward-looking statements.
Factors that could cause actual results to differ materially include the following: Whole Foods Market shareholders may not approve the transaction; the conditions to the completion of the transaction may not be satisfied, or the regulatory approvals required for the transaction may not be obtained on the terms expected, on the anticipated schedule, or at all; long-term financing may not be available on favorable terms, or at all; closing of the transaction may not occur or may be delayed, either as a result of litigation related to the transaction or otherwise; the parties may be unable to achieve the anticipated benefits of the transaction;…
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