BUSINESS

Retail industry a possum caught in Amazon’s headlights

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Amazon will have 465 Whole Foods stores in the United States, Canada and the UK. Photo / AP

Amazon’s US$14 billion (NZ$19.3b) buy of upmarket grocers Whole Foods Market has left the multi-trillion dollar worldwide retail industry like possums caught in the headlights of an oncoming juggernaut

Chances are retailers will be playing possum soon: investors were quick to dump shares in Whole Foods competitors after the acquisition was announced, wiping tens of billions of dollars off their value, as analysts wrote off giant chains like Walmart as being “screwed”.

When he started out, the online retail giant’s founder and chief executive Jeff Bezos derided the costly old-fashioned of bricks and mortar stores compared to selling online efficiently and cheaply.

That was then: the online retail giant has done well out of a low-margin, high-volume sales model that is cross-subsidised through its cloud computing business Amazon Web Services. It can now branch out into areas where a pure online presence wouldn’t be enough.

Like grocery stores, where a hybrid real-life/online model made more efficient with tech makes sense.

Bezos and Amazon will now have 465 Whole Foods stores in the United States, Canada and the UK to hone that notion.

It’ll be curious to see if Amazon will hang onto the more than 90,000 staff Whole Foods Markets has or let a bunch go to cut costs; but, Amazon means tech-driven…