How Amazon’s Whole Foods acquisition pushcarted the grocery e-commerce biz

A year after Amazon acquired Whole Foods, it is now becoming clear just how helpful that deal was to the entire online food retail business, mainly Amazon’s biggest competitors.

August 23, 2018

It’s been a year since Amazon acquired Whole Foods for $13.4B and set the grocery world ablaze, leaving every old school retailer wondering how they would build anew.

But, as the dust settles, it turns out Amazon’s Scrooge McDuck-dive into groceries has kickstarted the grocery e-commerce world, forcing brick-and-mortar retailers to forge online partnerships with up-and-coming startups.

Meanwhile, The New York Times reports that Amazon’s own grocery service, AmazonFresh, has ironically struggled to gain ground. 

Giants helping (future) giants

Food shopping is one of the final holdouts in major online retail, and the industry’s major players — big and small — owe Amazon (and the panic they caused) a thank you card. 

Like Ocado, an online grocery company, who recently pushed its stock market value to $6.8B after it inked a partnership with Kroger for its robotic labor services in fulfillment centers. 

Or Parcel, the same-day delivery startup Walmart acquired last October. And who could forget Alert Innovation, a small company that Walmart partnered with to use automated cars for pickup and transport of store orders.

Then there’s Boxed…

NYT reports that it took the CEO of Boxed, Chieh Huang, years to get grocery industry executives excited about the grocery e-commerce company’s autonomous warehouse technology.

But, all of that changed after the Whole Foods acquisition: On Tuesday, Boxed announced it had sold a minority stake to Aeon Group, one of the largest retail chains in Japan, valuing the startup at $600m.

Whole Foods was a wake-up call to old school retailers

Global food retailing is a $5T business and, while just 3% of the world’s grocery spending happened online last year, online grocery sales are expected to double over the next 4, to reach an estimated $334B by 2022. 

Talk about a Supermarket Sweep…

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