Amazon.com, Inc. (NASDAQ:AMZN)’s acquisition of Whole Foods Market, Inc. (NASDAQ:WFM) isn’t just a change-in-hands of grocery assets. It’s a critical play in distribution centers.
“I think this shows they’re rapidly expanding Prime Fresh and can deliver through 400-plus distribution points instead of through 20-plus now,” Wedbush analyst Michael Pachter told Benzinga. “They can figure out last-mile logistics, but they step up their distribution capability to within one hour of probably 75 – 85 percent of households with this move. This shows that they are serious about grocery as a category, and WFM has good distribution capability.”
The effects on publicly traded companies are widespread, and the market immediately reacted to the news with hits to grocery peers.
- Wal-Mart Stores Inc (NYSE:WMT) fell 5.7 percent.
- Kroger Co (NYSE:KR) fell 12 percent.
- Sprouts Farmers Market Inc (NASDAQ:SFM) fell 13.2 percent.
- Costco Wholesale Corporation (NASDAQ:COST) fell 7 percent.
- Target Corporation (NYSE:TGT) fell 12 percent.
- United Natural Foods, Inc. (NASDAQ:UNFI) fell 21.8 percent.
- SUPERVALU INC. (NYSE:SVU) fell 19.4 percent.
- SpartanNash Co (NASDAQ:SPTN) fell 5.1 percent.
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