WALMART NOT EXPECTED TO OFFER BID FOR WHOLE FOODS
Retailer won’t make rival offer for Whole Foods, Reuters says.
A week after Amazon unveiled plans to acquire Austin-based Whole Foods Market in a deal valued at $13.7 billion, Walmart has decided it won’t put in a rival bid, according to published reports.
The Bentonville, Ark.-based retail giant is one of several companies that had reportedly been looking at trying to match or beat Amazon’s $42-per-share offer, but the Reuters news service said Friday that no other bids had been submitted thus far.
Reuters, citing unnamed sources, said Walmart was “not actively considering making an offer.”
Neither Walmart nor Whole Foods would comment on the Reuters report.
Walmart bought online clothing site Bonobos for $310 million last week, on the same day news of the Whole Foods sale went public. It has made a number of other purchases recently to strengthen its online presence, including acquiring Jet.com.
Amazon’s all-cash offer, which still needs approval from stockholders and regulators, will give the Seattle-based company 466 brick-and-mortar Whole Foods stores in the United States, Canada and the United Kingdom.
Whole Foods, which has 87,000 employees worldwide, will continue to be based in Austin, Amazon said, and its founder and CEO John Mackey will continue as chief executive officer.
Aside from Amazon and Walmart, other companies reported to be interested in Whole Foods include three of the nation’s largest supermarket operators: Albertsons, Kroger and Publix.
Whole Foods has struggled in recent months, with sales stagnating. A March Barclays report said the retailer has lost 14 million customers since 2015 as a result of increased competition from mainstream grocers. The Amazon deal sent stocks for many of those competing chains plummeting amid analysts’ projections
that the e-commerce giant would slash prices to lure shoppers back.
Growing impatient, two of the largest Whole Foods investors — Jana Partners and Neuberger Berman — had publicly called for the chain to make a number of changes earlier this year, including possibly putting itself up for sale.
Mackey, in a recent interview with Texas Monthly, called agitators such as Jana Partners and Neuberger Berman “greedy bastards” who were just looking to make a quick buck.
Still, he told the magazine that Whole Foods needed to “evolve” — and said it has started that evolution. Last month, the company replaced nearly half of its board of directors and hired a new chief financial officer. At the same time, it vowed to improve technology, centralize its buying to get better deals from distributors and roll out a loyalty program at all its U.S. stores.
The Amazon deal, experts said, will make doing all that easier. The day before the transaction was announced, shares of Whole Foods closed at $33.06. Friday, they closed at $42.94 in regular trading.
Many analysts have also said they expect Amazon, which has been experimenting with an Amazon Go convenience store in Seattle, to make additional brick-andmortar acquisitions in the coming weeks and months. Discounter Dollar General is one name that has been frequently mentioned.
Whole Foods got its start in Austin nearly 40 years ago with a single store on North Lamar Boulevard staffed by just 19 workers. In fiscal 2016, it had grown to have annual sales of $15.7 billion.