The whole caboodle
ZEENAT MOORAD: Amazon's Hunger Games
That the tie-up took the market by surprise is testament to the presumption that cloaks the retail gorilla
There are sexy deals and then there’s Amazon buying bourgeois grocer Whole Foods. I love everything about this acquisition — the quantum (a cool US$13.7bn, the biggest in Amazon’s 23-year history), that no-one saw it coming and, mostly, because it’s a tacit admission that bricks-and-mortar retail ain’t going anywhere. Here’s the numbers stuff: the deal will add $16bn in revenue to Amazon’s top line, which is expected to top $200bn next year. Amazon is paying $42/share, representing a forward p:e of 32. SA doesn’t really have a Whole Foods comparison. The closest I can come up with is this: imagine, if you will, the love child of Woolies, Wellness Warehouse and the Neighbourgoods Market. With its attractively located stores and brand credibility, it is a catch. Then again, with an extensive fulfilment network, hordes of shopper data and deep pockets, who’d turn Amazon down? It’s important to know this: Amazon has tried, with tepid results, to sell groceries online. It wants to be in ...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.