Amazon deal a shop shock

Shares in supermarket giants plunge

CYBER giant Amazon has announced a near £11billion deal that piles pressure on the supermarket sector.

The online firm is buying US organic chain Whole Foods in its biggest push into physical stores.

Whole Foods has just nine shops in the UK – seven in London, plus one each in Cheltenham and Glasgow – but 440 in the US. Experts reckon Amazon will use stores to help turbocharge its grocery sales.

Shares in Tesco tanked 5% – despite it earlier anouncing a rise in sales – and Sainsbury’s shed 3.8% following the news.

Amazon Fresh, the firm’s online grocery delivery venture, launched a year ago.

It is now available in 302 postcodes in London and the South East, with more than 180,000 products. Amazon boss Jeff Bezos said Whole Foods would operate under the same name. Chris Beauchamp, chief market analyst at spread betting firm IG, said: “Amazon doesn’t so much park its tanks on a sector’s lawn as crash them through the store frontage.” While Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “Amazon is committed to cracking the grocery market. “The power of a physical presence on the high street to grow a brand’s reputation and credibility is particularly important in grocery, where consumers want to be able to see the quality of the items they’re buying first hand.”