+ 3.32
+ 0.95%
+ 2.82
+ 0.83%
+ 2.85
+ 0.67%
+ 0.37
+ 0.26%
+ 0.88
+ 0.53%

Attention United Natural Foods Investors: The Amazon-Whole Foods Deal Could've Been Worse

June 23, 2017 3:06 pm
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More

United Natural Foods, Inc. (NASDAQ:UNFI) investors should not be overly concerned about Amazon.com, Inc. (NASDAQ:AMZN)'s recent acquisition of Whole Foods Market, Inc. (NASDAQ:WFM), according to Loop Capital Markets managing director, Andrew Wolf.

Wolf maintains his Buy rating on United Natural Foods, but he trimmed his price target from $48 to $44.

United Natural Foods, currently has a supply contract in place with Whole Foods through 2025. After Wolf spoke with management at United Natural Foods, he believes this is still the plan. “It would take Amazon many years to replicate United Natural Foods direct-store-delivery network if it chose to do so,” he said.

This Is Not A ‘Non-Event’

On Monday, Pivotal Research's Ajay Jain said the acquisition will have a “mostly neutral” impact on United Natural Foods. However, he noted it was certainly not a “non-event,” and highlighted how Amazon is very capable of demanding pricing concessions as management might want to control more of Whole Foods' supply chain.


Wolf also pointed out Whole Foods does not have the store density or buying power to allow them to self-distribute. Currently, United Natural Foods offers Whole Foods the lowest cost to acquire organic and natural foods.

Overall, while Amazon’s acquisition of Whole Foods might have a huge impact for a variety of businesses, United Natural Foods investors should be concerned.

Related Links:

Amazon's Acquisition Of Whole Foods Should Create Lower Prices, Offer Better Consumer Experience

United Natural Foods Investors Have 'Misplaced Comfort' Following Amazon–Whole Foods Tie Up

For the latest in financial news, exclusive stories, memes follow Benzinga on Twitter, Facebook & Instagram. For the best interviews, stock market talk & videos, subscribe to our YouTube channel.

Related Articles

Emerging EV Market Dynamics: BofA Says GM, Volkswagen Aggressive Among Legacy Automakers

The lead that internal combustion vehicles have is shrinking as electric vehicles steadily find increasing adoption, according to a BofA Securities analyst.  read more

UPDATE: JP Morgan On Amazon: Multi-Year Head Start In The Cloud Has Led To 40%+ AWS Global Market Share

JP Morgan On Amazon: Co.'s Flexibility In Pushing First-Party Vs. Third-Party Inventory And Its Prime Offering Both Serve As Major Advantages In Its Retail Business

UPDATE: JP Morgan On Amazon: Co. Remains Firm's Top Pick Overall As It's Well- Positioned To Be The Market Leader In The e-Commerce And Public Cloud As Secular Shifts Remain Early