Amazon Wants to Rule the Grocery Aisles, and Not Just at Whole Foods

Amazon Wants to Rule the Grocery Aisles, and Not Just at Whole Foods

This article explores the history of Amazon's attempts to get into the fresh grocery game, and looks at potential future methods the company may use as it continues to do so.

Key findings

In June 2017, Amazon barged into the grocery business by announcing a blockbuster deal to buy Whole Foods for $13.4 billion. The purchase catapulted Amazon near the top of the $700 billion grocery industry.

In an effort to shed Whole Foods’ “whole paycheck” reputation, Amazon bought more from national food distributors and cut back on the local farms. Other price-cutting efforts failed. The mixed results are reflected in prices at Whole Foods today. A standard basket of goods has fallen about 2.5 percent since the acquisition, according to Gordon Haskett Research Advisors.

To be a major grocery player, Amazon would need a little more than 2,000 stores, a 2017 memo estimated. That’s far fewer than the 5,000 run by Walmart, the country’s top grocery seller, but more than the roughly 1,200 operated by Publix. Whole Foods got Amazon about a quarter of the way there.

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