June 26, 2017

Amazon's acquisition of Whole Foods could threaten Grocery Store Chains and More

An estimated 8,000 retail stores are closing in 2017 alone VS around 4,000 in the last recession of 2008

Amazon planned purchase of Whole Foods may not go very smoothly. There is a lot of opposition and regulatory hurdles for Amazon to clear the deal. This may be a selling opportunity for Amazon shareholders.

Doug Kass writes on TheStreet,
"The traditional bricks-and-mortar grocery chains face an existential threat.The values of the companies will now diminish over time coincident with a changing business landscape characterized by lower sales volumes and margin contraction.
Food manufacturers are also expected to face margin pressures -- perhaps not immediately, but certainly down the road. Besides the profit reductions, the values of those previously moated businesses are now uncertain.
Anticipated losers not only may be other retailers and suppliers but also in the ad industry. Amazon is NOT good for advertisers and Walmart advertises with great reluctance."

 Even politicians may get involved in this deal seeking to block it. 
"I am not at all sure antitrust forces will stand idly by, nor am I certain that politicians will stand by. Predatory price cutting may be a term that might become more familiar. I think this deal may take longer to close than anyone's wildest imagination. It threatens a lot of jobs. These employees have representatives and senators."

via www.thestreet.com/story/14185132/1/amazon-swallowing-whole-foods-will-produce-more-retail-indigestion-more-scrutiny.html