By The Canadian Press
TORONTO – Experts say Amazon’s blockbuster deal to buy the Whole Foods supermarket chain poses a threat to Canada’s grocers and could force them to lower prices, enhance technology or boost their e-commerce services.
Amazon announced Friday it plans to acquire Whole Foods Market in a US$13.7-billion agreement.
Moody’s vice-president Mickey Chadha says the move puts grocers on notice that Amazon intends to be a formidable player in the food business and is likely to accelerate consolidation in the supermarket industry.
Mike von Massow, a food economics expert at the University of Guelph, says Amazon could use the 13 Whole Foods locations in Canada to provide more grocery delivery and pickup offerings or roll out its checkout-free grocery store concept tested in Seattle last year.
He says Canadian grocers could drop prices, improve technology or beef up e-commerce to keep pace.
But GlobalData Retail managing director Neil Saunders says investing in such initiatives can be costly and may be unattractive for grocers as they face increasing competition from discount retailers.
Most Whole Foods locations in Canada are concentrated in the Greater Toronto Area and B.C.’s Lower Mainland.