Page 25 - aruba-today-20170620

BUSINESS Tuesday 20 June 2017
A25

Amazon-Whole Foods tie-up could speed grocery transformation

for a bite. And in a nod to ing up with startups. Insta-
the popularity of delivery cart, which operates in 69
companies like Blue Apron, markets, counts partners
Kroger and Whole Foods including Costco, Publix,
have been testing meal kits Target and Wegman’s.
as well. Whole Foods is also among
its partners, though the fate
DELIVERY & IN-STORE PICK- of their five-year contract
UP may now be up in the air.
Major grocery retailers
were already stepping GETTING BIGGER
up their efforts in delivery To try to compete with Am-
and in-store pickup of on- azon — which has become
line orders. And Amazon’s a go-to destination online
purchase of Whole Foods for a range of products —
underscores the value of other chains may look out-
physical locations in offer- side themselves to build up
ing such options. Many also their operations.
say they will always want Walmart, which gets more
to do some of their grocery than half its revenue from
shopping in person to see groceries, has been ex-
what they’re buying. panding with its acquisition
Customers shop at a Whole Foods Market in Upper Saint Clair, Pa. Amazon’s planned $13.7 billion “All stores are not going of Jet.com last year and
acquisition of Whole Foods signals a massive bet that people will opt more for the convenience away, it’s just a matter of last week said it was buying
of online orders and delivery or in-store pickup, putting even more pressure on the already highly finding the store/online online men’s clothing seller
competitive industry. equilibrium,” Credit Suisse Bonobos.
(AP Photo/Gene J. Puskar)
analysts said in a note. Other deals could follow
By CANDICE CHOI grow. cently opened store in New Maintaining the right the Amazon-Whole Foods
AP Food Industry Writer It’s not yet clear what York City. balance will be critical. announcement, with Cred-
NEW YORK (AP) — Grocers specific changes are in “I think retailers are going Walmart has about 4,700 it Suisse analysts saying that
trying to compete with the store at either Amazon or to have to bring a lot of ex- U.S. locations, with plans to mergers represent “the
threat of a combined Am- Whole Foods, since the citement to the store,” said offer curbside grocery pick- path to survival.”
azon and Whole Foods will two companies are saying Stew Leonard Jr., CEO of up at 1,100 by the end of JP Morgan analyst Ken
have to make their stores little about their plans. But Stew Leonard’s, a grocery this year. Kroger has nearly Goldman noted that
more appealing, leverage even before the deal was chain with five locations in 2,800 stores that operate Sprouts Farmers Market,
their locations to offer de- announced, grocers were Connecticut and New York. under a variety of names. which is known for its low
livery and do a better job scrambling to adapt to Leonard noted his chain is Whole Foods’ footprint is prices on natural and or-
of collecting shopper data. shifting habits. known for free samples and far smaller with about 440 ganic products, could be-
They may also need to Here’s a look at the chang- costumed farm animals locations, though those are come a more likely target
seek innovative partners of es that are expected to that walk around stores mostly in urban and afflu- for acquisition.
their own. accelerate. and greet shoppers. But he ent neighborhoods where Sprouts has about 270 lo-
Amazon’s planned $13.7 said he’s looking for ways delivery might be more in cations in 15 states. The
billion acquisition of the SHOW & SELL to modernize elements of demand. highly competitive and
organic and natural foods Grocery shopping is likely the “show” his stores put on As sales declined at es- saturated grocery industry
grocer signals a massive to get more sensory, as re- — such as the singing ani- tablished locations, Whole has been consolidating but
bet that people will opt tailers try to make stores a matronics — to ensure that Foods recently said it was is still fractured. The top 10
more for the convenience draw beyond just picking grocery shopping remains hitting the brakes on ex- grocery retailers plus Ama-
of online orders and deliv- up staples. a family event. pansion and that it no lon- zon control less than half of
ery or in-store pickup, put- Kroger Co., for instance, Prepared foods are anoth- ger saw potential for 1,200 the market, according to
ting even more pressure on has touted the opening er way grocers are increas- locations. The company John Blackledge, an ana-
the already competitive of Murray’s cheese shops ingly making their stores a hasn’t said whether that lyst at Cowen & Co. Sever-
industry. Though online or- in some locations. Whole destination. Some chains thinking changes under al hundred grocery chains,
ders are estimated to ac- Foods, a leader in redefin- have classical musicians Amazon. convenience stores, dollars
count for just 1 percent to ing the modern grocery play as shoppers wander In the meantime, other re- stores as well as mom and
2 percent of grocery sales, experience, offers a “pro- from wine sections to su- tailers are getting into the pop stores account for the
that figure is expected to duce butcher” at a re- shi stations or meet friends delivery game by team- rest.q