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Amazon to Expand Presence of Whole Foods Market Chain in Western States

01/03/2019

Amazon is banking on its Prime operation to generate synergy for Whole Foods Market, acquired in August 2017 for $13.7 billion. It is understood that since the Amazon takeover, sales have increased, but margins have declined due to Prime discounts.

Amazon, which earned $2.9 billion on sales of $57 billion during the most recent quarter, can afford to invest in growth and forego short-term profits. The behemoth now intends to expand into Idaho, Utah and Wyoming, especially in areas that are underserved by supermarket chains. Stores will not only display traditional Whole Foods’ products, but will also serve as pick-up and distribution centers for Amazon Prime.

A serious problem facing Amazon is disaffection of workers following the acquisition. Wage  rates have been increased to $15 per hour as a minimum although workers are agitating for unionization, a prospect which should concern the holding company.

The Wall Street Journal noted that John Mackey, co-founder and currently token CEO of Whole Foods noted that in 2019, the company would “pivot back to team member growth and happiness.” Hopefully Jeff Bezos shares this sentiment.