Amazon the online retailer is continuously expanding its business scope across different sectors including food. Recently the company has acquired Whole Foods for $ 13.7 billion which will surely take the company to new levels.
Amazon’s acquisition of Whole Foods will affect the existing players as well as the startup firm called Instacart. Many foods and tech companies are collaborating with each other to make sure that they don’t miss out a large volume of customer base and their shopping value.
Instacart delivers groceries to customer doors across 65 U.S. markets and it resells its groceries across 160 partner grocers. Instacart works with many big companies like Publix, Costco, and Wegmans. The shares of Walmart, Target, Kroger, and Costco have fallen in recent months.
Only a few online grocery stores are managing to compete in the race and oversea players are entering into this industry. The acquisition of Whole Foods will reshape the future of grocery store market. As Amazon is investing in one-hour delivery services like Prime Now, Instacart and it is difficult for Instacart to share the valuable customer data with the company.
The top players like Walmart supercenters, Safeway and Publix have managed to stand out of the crowd, smoothly entering into the e-commerce stores. Instacart and Whole Foods have signed up a 5-year delivery contract with Amazon and they are in the second year of their contract.
Hence, it is seen that Amazon may have to pay the big amount if they wish to break this deal. Here’s a list of retailers who will be affected by the latest industry developments:
Walmart, the Arkansas-based company is a big competitor of Amazon and the company wish to become as huge as Walmart with the acquisition of Whole Foods. Walmart is providing the efficient food pickup, delivery, and other services.
Costco, the Washington-based company acquires the third position in the global supermarket following Walmart and Carrefour (located in France).
Instacart turns out to be the Amazon’s competitor with its large market volume and current market share of $3.4 billion. It is an investor as well as the partner in Whole Foods.