Amazon pays £10.7 billion for grocery chain

Monday, June 19, 2017 - 09:20 by Mike Price

Although Amazon may have built its business selling books, gadgets, music and games via safe shopping online, in recent years it has veered into the world of groceries, with services like Fresh enabling it to deliver food products to customers’ homes.

Last week it took one step further towards total retail domination with the £10.7 billion acquisition of organic grocery chain, Whole Foods, which has a strong presence in North America and a growing footprint here in the UK.

The Telegraph reports that Amazon chief exec, Jeff Bezos, was enthusiastic about the deal, saying that he hoped his firm would be able to continue the good work that Whole Foods has been pursuing with its ethical approach to food.

Amazon has never spent so much on the acquisition of another organisation as it has in its deal to snap up Whole Foods, suggesting that it is getting serious about entering the bricks and mortar market, as well as bolstering its ability to sell groceries via safe shopping online.

In the UK, the expansion of Amazon Fresh will be more closely linked to its deal with supermarket giant, Morrisons, which has enabled it to offer food deliveries in a growing number of locations. The rollout of this service on a national scale will allow it to compete with incumbents like Tesco and Sainsbury’s.

Retail industry experts have been arguing that the expansion of Amazon into traditional areas of the market will enable it to take on Walmart, the US titan which has also been on an acquisition spree of its own in recent months. Amazon may be the king of e-commerce, but Walmart is seeking to improve its position in this sector, just as its rival has its sights set on high street growth.