Amazon could fix Whole Foods' biggest problem (WFM, AMZN)

pulse

June 16, 2017 5:02 PM

Amazon bought Whole Foods for $13.7 billion.

According to a UBS research note, the store will not be subject to the same near-term profitability expectations as its competitors given that it has the backing of a much larger corporation. This means it will be able to drop prices with less of an impact on investors which, according to UBS, is a necessary measure for the store to take in order to bring back same-store sales growth.

But with Amazon now behind them, Whole Foods finally has the chance to fight back and become competitive on price.

"Dominant players like Walmart, Kroger, Costco, and Target now have to look over their shoulders at the Amazon train coming down the tracks," Moody’s lead retail analyst Charlie O’Shea said.

This will be more crucial now more than ever as low-cost retailers from overseas, like Lidl and Aldi, begin expanding their presence in the US.

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