The whole truth about Amazon and Whole Foods

This article is brought to you by Retail Technology Review: The whole truth about Amazon and Whole Foods.

The e-commerce delivery firm ParcelHero says there is a good reason why Amazon's making the £10.7bn step into brick and mortar retail by purchasing Whole Foods Market: it could lead to a chain of cashier-less fresh food stores.

Amazon is getting in to the fresh food act in a fresh new way; spending $13.7bn (£10.7bn) purchasing Whole Foods Market. E-commerce delivery firm ParcelHero says Amazon is already delivering fresh food in the USA and UK, and this is a logical next step for the e-commerce giant.

ParcelHero's Head of Consumer Research, David Jinks, says: 'Amazon is certainly getting fresh about fresh produce. It has done a deal with Morrisons' to deliver online produce in the UK and is now very successfully delivering fruit and veg within the hour in a number of UK and US cities. The purchase of Whole Foods Market offers a huge new opportunity.'

Explains David: 'Amazon is known to be developing cashier-less stores in the US. It's already trialing them in Seattle. A chain of automated Whole Foods stores, in the US and here in the UK, might prove attractive to busy younger shoppers, hard pressed for time but interested in eating healthily; which would complement the online business.'

Continues David: 'The deal makes sense as Whole Foods attracts entirely the young, middle class consumer Amazon is trying to reach with its latest expansions into new markets such as pharmacies and car sales. The Whole Food market chain shook up the food retail industry in the same way Amazon has shaken up e-commerce at its launch, bringing organic and health foods to the table of people across the US and Britain. But recently Whole Foods' growth has stopped and earlier this year Whole Foods revealed it was to close nine US stores.

'Whole Food Market had perhaps reached the end of its potential so far as new High Street sales are concerned. Increased competition from mainstream supermarkets had undercut its market and damaged its USP. Amazon can develop its online potential considerably, as well as bring a fresh approach to its physical stores.'

Founded in Austin, Texas, in 1980, Whole Foods has around 460 stores including a number in the UK. Whole Foods has become a favourite with young health conscious shoppers; who are the type of customer Amazon is keen to encourage into its till-free stores and Prime membership programme.