LONDON — Shares in British supermarkets are plunging on Friday afternoon after the news that retail giant Amazon will buy US food retailer Whole Foods.
The online giant is buying the high-end grocer for $US42 (£32.90) a share, valuing the company at $US13.7 billion (£10.7 billion).
“Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,” Amazon CEO Jeff Bezos in a press release. ” 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.”
Amazon had already moved into the grocery space with its Amazon Fresh and Amazon Pantry services — which in the UK includes a partnership with supermarket chain Morrisons — but its purchase of Whole Foods is a very obvious sign that it is taking grocery retail seriously.
Given the firm’s complete dominance of the online retail space, investors in Britain’s supermarkets are understandably worried about Amazon’s aggressive expansion into groceries, and shares are dropping rapidly as a result.
Here is how Morrison’s looked a little after 2.15 p.m. BST (9.15 a.m. ET):
And here is how rivals Tesco and Sainsbury’s look:
Online grocer Ocado has long been subject of speculation about a possible takeover by Amazon, although that has never turned into anything concrete. Here’s how its stock has reacted: