Amazon's next target should be Grubhub-and here's why, says top analyst

Phillip Butler
June 22, 2017

He said, for the time being, Amazon will be focused on the Whole Foods deal.

In a town meeting held the day the deal was announced, Mackey shed light on how the deal between Whole Foods Market and the world's largest retailer, Amazon, actually went down.

Stock prices for grocery sellers like Costco, Target, and Kroger have tanked since word broke of Amazon's acquisition, and some Whole Foods loyalists have bashed the deal as a sellout that could destroy a retail brand they love.

Arroyo acknowledged that there may be a few pros to buying produce online, but laments that personal service a grocery store can offer will slowly fade as Amazon begins its reign a grocery conquistador. "I got a great standing O. Trust me, this is gonna be- (LAUGHTER) this is gonna be- this is going to be such a good thing for Whole Foods Market".

"This will only help Amazon, whole foods consumers, this is a win-win for everyone", says Lempert.

"Whole Foods does physical well, and Amazon does tech well".

Owners of the Amazon Echo smart home device can already use the Alexa voice assistant to order food through Grubhub. "Because, little over six weeks after we met on this blind date, we're officially engaged", Mackey said. "They will push pretty heavily to integrate Whole Foods with Amazon, I'm sure there'll be Prime rewards for shopping at Whole Foods", Barnett says".

"I think the most important aspect of the purchase is that it gives Amazon 440 refrigerated distribution centers in the USA and probably puts their distribution presence within 10 miles of 80% of the population and within 90% of the wealthy population", he wrote in an email to CNBC.

It may not be evident on the surface but Amazon's buyout of Whole Foods could mark the Seattle company's next big step in automating how we buy things.

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

Wall Street signaled Monday that it expects a rival offer for Whole Foods to surface, and many industry and merger experts agreed. "The company didn't say which banner, Whole Foods Market or 365 by Whole Foods, would lead that growth", Michelle Grant, head of retailing at Euromonitor, wrote to Retail Dive in an email.

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.

And Amazon has plenty to learn about bricks-and-mortar grocery.

"Amazon has had grocery ambitions for a long time", says Bloomberg food reporter Craig Giammona.

"The acquisition of Whole Foods makes entry into pharmacy much easier for Amazon", Stephen Buck, entrepreneur and co-founder of GoodRx, told CNBC on Friday. Amazon has, however, rolled out a futuristic store concept with no cashiers or checkout lines.

Other reports by Ligue1talk

Discuss This Article