Whole Foods: Amazon attacks immediately, the stock market is the first to feel the blow

30 Aug 2017

Since Monday Whole Foods, the most important American supermarket chain, is in fact a subsidiary of Amazon, which acquired it for $ 13.7 billion in June.  Prior to formalization, the Federal Trade Commission's assent was required, which was issued just a few weeks ago.  The operation had a remarkable effect, and Wall Street was not slow to react, with Whole Foods skyrocketing more than 27%, and Amazon increasing over 3%.

Amazon's first move is a strong promotional campaign at many Whole Foods sales outlets. Discounts of up to 51% on some of the most popular products such as organic bananas, salmon and lean meat will be applied. The reasons for the initiative can be found in Amazon's desire to expand the Whole Foods customer base, which always revolved around a medium-high range of buyers, and thus increase pressure on competitors. There is an actual possibility that a price war will be initiated.

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Amazon's official position was presented by Jeff Wilke, head of Amazon Worldwide Consumer. "We are determined to make healthy and bio food accessible. Everyone should be able to consume Whole Foods products and we will lower prices without compromising Whole Foods' historic commitment to quality products".

The stock market did not remain indifferent to the evolution of the situation, although this time with negative indicators.  On Wall Street, many of the major retailers such as Kroger and Walmart have been affected by Amazon’s initiative and the S & P 500 retailer index has decreased more than 4%. Retail Stock Index Stoxx600 has fallen by almost 1% and shares of large retailers have moved to the bottom of the European charts. This has affected Tesco, Marks and Spencer and Kingfisher in London; Carrefour in Paris; in Amsterdam Ahold decreased by 4.5%, in Madrid Dia (Distribudora Internacional de Alimentacion) lost 1.4%.