The Federal Trade Commission has given the all-clear to Amazon.com’s purchase of Whole Foods Market and said it will not pursue further investigation of the $13.7 billion deal, which is set to formally close on Monday, August 28, 2017 and be finalized by the end of the year.
Whole Foods shareholders voted to approve the deal, which does not require Amazon shareholder approval.
Once the acquisition closes, Amazon will have an estimated 2 percent share of the U.S. grocery market, where competition has never been more cutthroat.
In a statement, Amazon said the two companies “will together pursue the vision of making Whole Foods Market's high-quality, natural and organic food affordable for everyone. As a down payment on that vision, Whole Foods Market will offer lower prices starting Monday on a selection of best-selling grocery staples across its stores, with more to come.”
Among the first orders of business is an integration of the two companies’ technology teams, which will focus on Whole Foods’ point-of-sale system, which when complete, will enable Amazon’s Prime members to receive special savings and in-store benefits. The two companies will invest in additional areas over time, including in merchandising and logistics, to help deliver lower prices for Whole Foods Market customers, which for many observers, has been long overdue.
"We're determined to make healthy and organic food affordable for everyone,” said Jeff Wilke, CEO Seattle-based Amazon Worldwide Consumer. “Everybody should be able to eat Whole Foods Market quality,” Wilke continued, adding that Amazon will lower prices beginning Monday with “a selection of best-selling grocery staples, including Whole Trade organic bananas, responsibly-farmed salmon, organic large brown eggs, and animal-welfare-rated 85 percent lean ground beef,” among others.
Wilke said Amazon will initiate a rewards program for its Prime/Whole Foods customers as it “continuously lower prices as we invent together. There is significant work and opportunity ahead, and we're thrilled to get started."
"It's been our mission for 39 years at Whole Foods Market to bring the highest quality food to our customers," said John Mackey, co-founder and CEO of Austin, Texas-based Whole Foods Market. "By working together with Amazon and integrating in several key areas, we can lower prices and double down on that mission and reach more people with Whole Foods Market's high-quality, natural and organic food. As part of our commitment to quality, we'll continue to expand our efforts to support and promote local products and suppliers. We can't wait to start showing customers what's possible when Whole Foods Market and Amazon innovate together."
According to the companies, starting Monday, Whole Foods will offer lower prices on a selection of best-selling staples across its stores. Initial items seeing price cuts include Whole Trade bananas, organic avocados, organic large brown eggs, organic responsibly-farmed salmon and tilapia, organic baby kale and baby lettuce, animal-welfare-rated 85-percent lean ground beef, creamy and crunchy almond butter, organic Gala and Fuji apples, organic rotisserie chicken and 365 Everyday Value organic butter.
Eventually, after certain technical integration work is complete, Amazon Prime will become Whole Foods Market's customer rewards program, providing Prime members with special savings and other in-store benefits.
Whole Foods Market's healthy and high-quality private label products--including 365 Everyday Value, Whole Foods Market, Whole Paws and Whole Catch--will be available through Amazon’s Amazon.com, AmazonFresh, Prime Pantry and Prime Now services.
Amazon Lockers will be installed in select Whole Foods Market stores, allowing customers to have products shipped from Amazon.com to their local Whole Foods Market store for pick up, or send returns back to Amazon during a trip to the store.
The companies state they plan to offer more in-store benefits and lower prices for customers over time as the they integrate logistics and point-of-sale and merchandising systems.
Whole Foods Market expects to continue to grow its team and create jobs in local communities as it opens new stores, hires new employees and expands its support of local farmers and artisans. The company will maintain operations under the Whole Foods Market brand, as well as its present global vendors and partnerships. Mackey will remain as CEO and Whole Foods Market's headquarters will remain in Austin.
Whole Foods has annual sales of approximately $16 billion and currently operates more than 460 stores throughout the United States, Canada and United Kingdom.