For Amazon, the deal is more about getting a distribution network for groceries, said Michael Pachter, an analyst at Wedbush Securities Inc. It has spent years trying to break into delivering groceries, but hasn’t been as successful as in other categories.
Amazon previously contemplated a takeover of Whole Foods last fall, but it didn’t pursue a deal, a person with knowledge of the situation has said. The e-commerce company revisited the idea after Jana stepped in.
“Amazon clearly wants to be in grocery, clearly believes a physical presence gives them an advantage,” Pachter said. “I assume the physical presence gives them the ability to distribute other products more locally. So theoretically you could get 5-minute delivery.”
Internationally though, the Whole Foods deal raises the question what Amazon’s grocery strategy outside the US will be like in the future. More, local acquisitions? And, more broadly, how internationally is Amazon seeing itself? As Benedict Evans, industry analyst at VC firm a16z, says:
Needless to say, Whole Foods will be Amazon’s biggest acquisition yet.
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