Amazon shares hit intraday high in wake of Whole Foods deal

Adjust Comment Print

Mergermarket's Lim says the first challenge for Amazon is how to successfully run a physical supermarket chain.

And so we will be joining a company that's visionary. "We just had these big grins on our faces, like, 'These guys are unbelievable'".

In his address, Mackey hinted at his answer to one of the big questions hanging over the Amazon-Whole Foods merger.

"From that, and depending on what they learn, we could see a strategy emerge in other realms, for example food manufacturing", she says. And- these guys are really smart people.

"Growth in both of those verticals is probably not as robust as they would have liked and they need to go out and make an acquisition to help support those initiatives", Turner, who has an "outperform" rating on Grubhub, said on "Squawk Alley".

"There are no guarantees in life", Mackey said in response to a final question from an audience member to wrap the meeting.

Obviously thinking about their first date together.

"This transaction is going to change the landscape of how you buy food", Mickey Chadha, Moody's vice president and senior credit officer who covers Whole Foods, told CNBC's "Squawk Box" on Monday morning. But Mackey promised a big shift in focus.

Amazon now has a grocery delivery service called Amazon Fresh, available in about 20 cities in the USA, but it struggled to make enough headway in becoming America's grocer.

Meyer said the "house brands", usually generic - and often cheaper - alternatives to brand name products, are gaining popularity, and that consumers could see even lower prices on those items if Amazon decides to pursue that route, because Amazon is known for its low prices on items.

Albertsons Companies Inc., the nation's No. 2 grocery-chain behind Kroger Co., began talking to Whole Foods earlier this year, after activist investor Jana Partners LLC began a campaign in February urging Whole Foods to sell. They're not playin' a bunch of BS games. About a year and a half ago, I dreamed that we merged with Amazon.

What exactly might these innovations be?

Amazon has been dipping its toes in groceries since it launched its Amazon Fresh delivery service a decade ago in Seattle, and expanded it to California, New York, and the Philadelphia area.

Aaron Turner, a Los Angeles-based analyst who covers Grubhub for Wedbush Securities, wrote in a note to clients Monday that the tech giant's plans to buy Whole Foods for almost $14 billion set it up for a larger food ordering and delivery play. "And she said, 'That's insane.'" Mackey said, drawing guffaws from employees at a town hall meeting on Friday. It's gonna be an fantastic team for our team member base.

And Amazon has plenty to learn about bricks-and-mortar grocery. The Whole Foods chain has 460 stores across the US.

"Every grocery store out there now is having a conversation about how much they can afford to spend to keep Amazon out of the space", said Brian Culpepper, a portfolio manager at James Advantage funds. "But they're just not gonna be, I don't think, forced on us by Amazon". Whole Foods will be a lab of sorts for Amazon.

We're speculating a lot about what the Amazon-Whole Foods deal will mean in the short and long term. "He'll be very careful tinkering with anything that could hurt the value of the brand". Whole Foods had been working to get better at data collection with the rollout of a loyalty program, and Amazon is expected to give those efforts a significant boost.