Amazon's purchase of Whole Foods 'bought a distribution network,' expert says

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Now, it's unlikely that small businesses will be involved in many deals of this magnitude. However, the company has now chose to take the plunge by acquiring Whole Foods Market in a deal that dwarves all the previous deals that the company has completed. These are likely to be higher income households that traditionally spend the most on cuts of meat and buy expensive brands.

The announcement has sent traditional grocery stores and chains such as Target and Walmart scrambling. On Friday, WalMart announced it is buying men's online clothing retailer Bonobos for $310 million. Under the terms of the deal, John Mackey would remain CEO of Whole Foods, according to a report from MarketWatch.

Whole Foods was founded in 1978 and now has more than 460 locations, three of which are in Westchester towns.

Shares of big-box retailer Target Corporation (NYSE:TGT) took an early hit in trading Friday, after word hit that Amazon (NASDAQ:AMZN) is buying grocer Whole Foods Market (NASDAQ:WFM).

So what's leading to all this pharmaceutical heartburn over a grocery-retail deal?

With Whole Foods, Amazon gets an established business that it can transform through its technology and supply network expertise.

"This deal should leave no doubt that Amazon is deadly serious about dominating all aspects of retail", Paul Cuatrecasas, chief executive of Aquaa Partners, a London-based investment banking firm, said in an email. "This just gives them the ability to sell grocery items in a way no grocery store can do". The shopper's Amazon account gets automatically charged.

The competition is already probably experiencing a lot of unease right now.

This is further proof that one day, Amazon will run everything. All of these are hints of what Amazon might bring to Whole Foods. And the key measure that retailers look at to gauge their health, revenue at stores open more than a year, has fallen for seven quarters in a row. A spokesman for Dunnhumby said it remains committed to its partnership with Whole Foods. Mackey will stay as CEO, and the headquarters will stay in Austin, Texas.

Approval of the sale is expected by the second half of 2017.

The deal will see Amazon in hundreds of physical stores across the country as it fulfills the e-commerce company's goal of selling more groceries to the public.

The online giant a year ago declared its plans to open a physical grocery store called Amazon Go, a market without cashiers where consumers would be automatically charged based on the items they placed into their shopping bags. Ahold Delhaize, the parent company of the Food Lion and Giant supermarkets, plunged 10%.

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