Amazon buying Whole Foods: Bay Area shoppers react

OAKLAND (KTVU) -- The Whole Foods store at the foot of the Oakland Hills is an always busy success story even as some customers expressed a range of views when asked about Friday's bombshell announcement that online giant Amazon is snapping up the specialty grocer.

"For the most part, it's too expensive for me to do all may shopping there," said Mary Funari, a Whole Foods shopper.

"The quality will be going down," predicted one customer named Gabrielle. "Amazon will . . . will be firing people. There will be less people working. There will not be clean like is now. I just don't like it."

"The quality will give to provide a cheaper price to consumers," said Whole Foods Shopper Hamid Fhehollahi.

Stanford University Marketing professor Wesley Hartmann said quality may not slip if the takeover comes to fruition because Amazon is incredibly efficient, while industry analysts have said Whole Foods is not.

Hartmann said he expects the online retailer to introduce some efficiencies to Whole Foods' operation.

"I anticipate that Amazon should be able to lower the cost of Whole Foods and better enable them to compete in that market and start to bring some of those great organic products that people have liked without necessarily having to capture their whole pay check," he said. "I think this is kind of a natural extension of Amazon's business model."

Some customers said they believe Whole Foods shoppers will quickly adapt if Amazon does widen the online grocery shopping experience.

"People tend to do what's easy and clicking on something on Amazon is so easy," Funari said.

Patience Amoqwandoh said: "Then it will be cheap, too. If you sit in your house and order something, they will bring it to you."

Amazon is invading the brick-and-mortar space of Walmart as Walmart did to Amazon's online space.

"Walmart took their step first, which was acquiring Jet.com (and) recognizing their need to move into that space," Hartmann said.

Amazon is making a bold expansion into physical stores with the $13.7 billion deal to buy Whole Foods, setting the stage for radical retail experiments that could revolutionize how people buy groceries and everything else.

Amazon could try to use automation and data analysis to draw more customers to stores while helping Whole Foods cut costs and perhaps prices. Meanwhile, the more than 460 Whole Foods stores in the U.S., Canada and the U.K. could be turned into distribution hubs -- not just for delivering groceries but as pickup centers for online orders.

"The conventional grocery store should feel threatened and incapable of responding," Wedbush Securities analyst Michael Pachter said.

Moody's lead retail analyst Charlie O'Shea said the deal could be "transformative, not just for food retail, but for retail in general."

Walmart, which has the largest share of the U.S. food market, has already been pushing harder into e-commerce to build on strength in its stores and groceries. It announced Friday that it's buying online men's clothing retailer Bonobos for $310 million, following a string of online acquisitions including ModCloth and Moosejaw.

But if Amazon can be the one-stop shop for everything -- groceries had been one of the key missing elements -- customers would have even less of a need to go to Walmart or elsewhere.

Since Whole Foods is a publicly traded company it could be scuttled if another bidder decides to offer a lot more money for the grocery chain.

By KTVU reporter Tom Vacar. The Associated Press contributed to this report.

 
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