Market Overview

The Effects Of Amazon-Whole Foods Deal Will Be Wide Spanning; Grocers Already Taking A Big Hit

The Effects Of Amazon-Whole Foods Deal Will Be Wide Spanning; Grocers Already Taking A Big Hit
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The Fingerprints Of Buffett's Next Deal (Seeking Alpha), 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.

Latest Ratings for AMZN

Feb 2018MKM PartnersMaintainsBuyBuy
Feb 2018NomuraMaintainsBuyBuy
Feb 2018Credit SuisseMaintainsOutperformOutperform

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Posted-In: Michael PachterAnalyst Color News M&A Exclusives Intraday Update Analyst Ratings Movers Best of Benzinga


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