Whole Foods traded in the mid-$30 range for May and the first part of June.
In May, under pressure from Jana Partners, Whole Foods replaced five board members and its chief financial officer. Whereas existing fulfillment centers are huge, industrial, and off limits to the public, Whole Foods will be contained and open as ever.
Whole Foods, often derided as "Whole Paycheck" for its high prices, could see its reputation change if Amazon, a master at undercutting its brick-and-mortar rivals, passes any savings from automation to customers. Whole Foods could also become "Whole Foods by Amazon", or some other derivative. Walmart, which has been trying to compete against Amazon by leveraging its retail stores as mini-distribution centers for deliveries of grocery and other goods, was holding up pretty well compared to its peers, however.
Empire: The parent company of several grocery store chains offers online shopping with either delivery, in-store pickup or both at several IGA locations. "Why would it keep Instacart?" said Smith. The hedge fund held 26,074,830 shares purchased at an aggregate price of about $794.5 million as of May 27, 2017, a filing with the U.S. Securities and Exchange Commission showed. "Why is Amazon going to let a third party vendor take margin off of their sale?" Amazon, on the other hand, started as an online bookstore and then proceeded to evolve quickly, breaking into new markets ranging from music streaming to grocery delivery.
"This partnership presents an opportunity to maximize value for Whole Foods Market's shareholders", he said.
Hetu said Amazon isn't likely to bring that to Whole Foods right away but could deploy pieces of it to further cut costs.
Grocery stores are under more pressure to compete based on convenience, especially as more retailers and startups introduce food options such as meal kits, low-priced snacks and organic groceries, according to a report released earlier this year by Jones Lang LaSalle, a commercial real estate firm. The company gets a revenue share from retailers based on the size of each basket. It also provides delivery to three condos in Toronto. So were Walmart and Target, which made big moves into groceries in recent years and now depend on food for a huge chunk of their sales.
General Mills shares were down 3 percent. It announced Friday that it's buying online men's clothing retailer Bonobos for $310 million in cash, following a string of online acquisitions including ModCloth and Moosejaw.