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Amazon to clash with Wal-Mart

Tuesday, June 20, 2017 - 01:21

Amazon's purchase of Whole Foods Market aims at Wal-Mart's groceries business, which accounts for more than half of its revenue. Fred Katayama reports.

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With the purchase of Whole Foods, Amazon is aiming at the heart of Wal-Mart, the grocery business. For starters, analysts say, Amazon will most likely lower Whole Foods' notoriously high prices. It will also use Whole Foods' 466 stores to learn how to compete with Wal-Mart's 4,700 locations. But Wal-Mart may be ready. It has cut prices, improved fresh food and meat offerings, modernized its grocery aisles, and expanded its online grocery pickup service. It also ventured into Amazon's territory when it bought online retailer Jet.com last year. 24/7 Wall St. CEO Doug McIntyre: (SOUNDBITE) DOUGLAS A. MCINTYRE, CEO, 24/7 WALL ST., LLC (ENGLISH) SAYING: "You are now in a business here where all stops are out. These guys are now in a bloody, bloody, deadly battle. There are billions if not tens of billions of M&A money sloshing around, so, people were surprised by the Whole Foods deal. That's not the end of the surprises." Wal-Mart controls 22 percent of the U.S. grocery market. Amazon is just one of many who want part of it. The list includes Kroger, Target and German discounters Aldi and Lidl. Whole Foods shares kept rising Monday, leading to speculation rivals could step in and spark a bidding war.

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Amazon to clash with Wal-Mart

Tuesday, June 20, 2017 - 01:21