ONLINE giant retailer Amazon said it would buy posh supermarket Whole Foods in a deal valued at $13.7 billion (£10.7bn) as it makes a deeper push into the grocery market.
The deal is set to dramatically increase Amazon’s physical retail footprint.
Amazon started delivering food for the first time in the UK last summer with AmazonFresh, after signing a wholesale deal with supermarket Morrisons.
Starting with 69 London postcodes it has now expanded to 250 including selected parts of the southern England county of Hampshire.
AmazonFresh allows Prime members to do their weekly grocery shopping on the site and have them delivered the same day.
In the US, it has also opened its own brick-and-mortar bookstores and has rolled out the Amazon Fresh delivery service across the country.
Neil Wilson, senior market analyst at ETX Capital, said the deal is a huge development for US retail.
“A big, big play by Amazon for Whole Foods in a deal worth $13.7bn that is leaving rivals quaking,” Mr Wilson said.
“Amazon looks set to dominate the food sector now just as much as it does non-food. Amazon brings incredible scale and pricing power that will make life a lot tougher for anyone else,” he added.
On Friday, Amazon CEO and founder Jeff Bezos said: “Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy.
“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.”
Whole Foods will continue to operate stores under the Whole Foods Market brand and John Mackey will continue as chief executive of the company.
“This partnership presents an opportunity to maximise value for Whole Foods Market’s shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers,” Mackey said.
The takeover deal is expected to be completed in the second half of the year.
Founded in Texas, in 1980, Whole Foods has about 460 locations worldwide including several in the UK.