Amazon is buying Whole Foods for $13.7 billion, expanding Amazon's move from online to brick-and-mortar stores while attempting to alleviate some of the Whole Foods' financial problems, according to CNN Money.
There aren't a lot of details yet about the deal, but John Mackey will remain CEO at Whole Foods, the grocery chain will keep its name, and Whole Foods will operate as a separate unit of Amazon.
Amazon has already ventured into the physical grocery store business, launching Amazon Go last year, although those stores seem to focus more heavily on prepared foods than on traditional groceries. Whole Foods announced earlier this year that it would lower grocery prices, putting it more in line with stores like Aldi and Target.
Will that promise of lower grocery prices remain once Amazon takes over? Amazon is known for prices that often beat the competition, and that reputation already has many concerned about the influence the tech company will have on food prices and how well other stores will be able to compete.
Food & Water Watch released a statement, saying the acquisition will result in "higher prices, fewer choices for consumers and more profits for billionaires" and calling for the Federal Trade Commission to block the merger.
The top four grocery retailers already control 62 percent of food sales, raising prices and reducing choices for consumers. This nearly $14 billion takeover would combine the dominant online retailing giant with one of the country’s 10 biggest supermarket chains.
Consumers already face substantially reduced options for grocery shopping because of a wave of mega-mergers that have swept the supermarket and grocery manufacturing industry. In recent years, more than 4,000 grocery stores were joined under two owners after the Albertsons-Safeway and Ahold-Delhaize mergers. The proposed Amazon-Whole Foods deal only further curtails consumer choices and raise prices.
The deal also has Wall Street jumping. The stocks of other grocery chains and retailers like Kroger and Dollar General were all down immediately following the announcement. In a fast-paced segment this morning, CNBC's Jim Cramer also said that "all suppliers who don't have scale" will be affected by this, and that Amazon could "own grocery" once this goes through, pointing to all the vacant real estate out there where Amazon could place Whole Foods stores.