Amazon buys Whole Foods in a $13.4 billion deal

Amazon, the world’s largest ecommerce player, has agreed to buy the upscale grocery chain Whole Foods in a $13.4 billion deal in a bid to expand in the groceries business. The company has been pushing itself into the offline space with numerous experiments such as cashless supermarkets, bookstores etc. it recently opened two grocery drive-through stores where customers can pick up online orders, along with a convenience store called Amazon Go that uses sensors and software to let shoppers sail through the exits without visiting a cashier. It is expected that Amazon could use its $99-a-year Prime membership service, which gives customers free, two-day shipping and other benefits, to offer Whole Foods customers a better price on groceries, as it does for books in its bookstores.

The acquisition is mainly targeting Walmart, the largest grocery retailer in the United States, which has been struggling to play catch-up in internet shopping. It has also been venturing into the online space by acquisitions. Last week, Walmart announced a $310 million deal to acquire the internet apparel retailer Bonobos, and last year it agreed to pay $3.3 billion for Jet.com and put Jet’s chief executive, Marc Lore, in charge of Walmart’s overall e-commerce business.

With both the players not targeting each other’s space, it will be an intense battle in future for the retail business of the US customers.