Its balance-sheet cash could in theory finance almost half the acquisition and, with total debt now at about 1.5 times EBITDA, it could borrow more.
Ocado shares rocketed by nearly 7% on Monday as Amazon's swoop on USA grocer Whole Foods raised the prospect of a supply deal between the two online retailers.
The co-founder of organic candy brand, Torie & Howard, Torie Burke said, "It's exciting that a progressive company like Amazon has moved into the natural and organic space".
Online retail sales are expected to decelerate while the overall retail market still holds a lot of potential. This is due to smaller shipments being spread over a large number of distribution centers. "We expect continued downward pressure on pricing from intense retail competition, driven by retailers like Walmart, Aldi and Lidl and online retailers, too".
Retail has a amusing way of surprising you, just when you think there are set patterns and understood norms a left field acquisition comes out of the blue, one that now looking at it makes sense.
While Mackey returned to brick-and-mortar retail in 2002, increasing sales almost six-fold, Amazon leapfrogged from books and music to produce and diapers, and built a subscription-delivery service called Prime. It has also added online and offline features to its bookstores. In other words, Amazon sees more than just a grocery subsidiary in Whole Foods.
How does Walmart, the world's largest retailer, see its future in light of Amazon's moves? This in turn could give it an edge over competing retailers. But Parikh added that activist investors have a stake in Whole Foods.
To that end, Amazon is encroaching on territory long dominated by the likes of UPS, FedEx and the U.S. Postal Service. Sources close to Morrisons said the Whole Foods buy was unlikely to affect the existing relationship. Short reasons that this theoretically means that such a company could pay more for Whole Foods than Amazon could.
But that may not happen anymore. I don't think this is a big risk for Whole Foods.
As Amazon flirts with disparate businesses ranging from prescription drugs to real estate brokerage, the fallout is hardly a win-win for everyone, Lipman explained.
"Amazon and Whole Foods working together will give Whole Foods richer data and insight, opening opportunities for unique innovation, new ways to market to consumers and better insights when building brands". "It is a tsunami that will shake up and change grocery retailing".
Stevens shared a sentiment expressed by other aficionados: excitement about the convenience of getting groceries from the store delivered to her mixed with concern about changes to a company that helped pioneer the organic-food market in the U.S.
Ryne Misso of the research firm Market Track said a customer who buys fresh fruit regularly at Whole Foods might be offered a deal on blenders and serving bowls.
Yes. That's an extraordinary penetration for a supermarket chain with just 431 stores.
Magid Retail Pulse data showed that while 40% of US consumers use Amazon Prime in some respects, grocery is its least impacted category, as only 13% of Prime users shop for groceries on the site. Trussell sees Costco's online operations as lagging its brick-and-mortar peers.