A leading economist has welcomed Amazon’s shock $US13.7 billion takeover of Whole Foods, saying it could be very good news for Australian grocery shoppers.
UNSW Professor Richard Holden, who spent a decade teaching and researching at top US universities, said he hoped Amazon would open Whole Foods supermarkets in Australia, as the sector is ripe for a new premium competitor.
“As someone who lived in the US for 10 years and shopped at Whole Foods every second day, it would be great for the consumer if they came to Australia,” he told The New Daily.
Amazon announced on Saturday it had signed a binding $US42-a-share merger contract with Whole Foods, which has 460 supermarket outlets across the US, Canada and the UK.
This was a radical shift in strategy for Amazon. Almost overnight, it went from an almost entirely online retailer to an enormous bricks-and-mortar grocery powerhouse.
With last year’s launch of AmazonFresh, an online grocery delivery service, it’s clear CEO Jeff Bezos wants Amazon to change grocery shopping forever.
“Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,” Mr Bezos said in a statement.
“Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades – they’re doing an amazing job and we want that to continue.”
All physical stores will continue to operate under the Whole Foods brand, Amazon confirmed.
Professor Holden said the premium supermarket chain, which specialises in healthy, vegan and eco-products, could be expanded to Australia after AmazonFresh officially launches here in 2018.
“Coles and Woolworths seem to charge fairly high prices, so if someone was to come in with a premium offering like Whole Foods, then they’re not trying to battle into a market where people are used to paying extremely competitive prices,” he said.
“It’s certainly a market where a premium offering like Whole Foods might appeal, and where prices are already, shall we say, not low.”
Professor Holden said his experience of shopping at Whole Foods regularly while living in the US was overwhelmingly positive.
“They have a lot of organic food, really high-quality produce, a lot of incredibly good prepared meals as well. It’s like shopping at David Jones food hall, basically, but for everything,” he said.
“If you had to pay incredibly high prices, that would be one thing. But they’re really not that bad, compared to Australian prices.”
Whole Foods will join AmazonFresh for groceries, Amazon Prime for TV shows and movies, Kindle for e-books, Audible for podcasts and audiobooks, Echo to rival smart assistants like Apple’s Siri, and IMDb for movie reviews, among many other subsidiary companies.
Maria Prados, vice-president at online payments platform Worldpay, said in a statement that Amazon’s purchase was a “clear sign of its intention to disrupt the grocery industry globally”.
“From the ‘Dash’ buy button, to the launch of the AmazonFresh service last year, the eCommerce giant has been taking clear steps to build its position in the grocery sector. And investing in a physical presence could be the key to Amazon’s success in this space,” Ms Prados said.