Following a green light on Thursday, Aug. 24, from the Federal Trade Commission on Amazon's $13.7 billion deal to buy Whole Foods, and the shareholders' yes on Wednesday, Aug. 25, the upscale grocer is set for big changes.
Barclays analyst Karen Short wrote in a note on Friday that Amazon could apply its bookstore prototypes strategy to redoing the traditional grocery story, evident in Whole Foods stores. That means, she wrote, that it will be "clearly showing titles," but "not a bountiful selection" with the "goal of a higher hit selection."
But, Short also pointed out how Whole Foods' stores might no longer try to sell all things, to all people. After all, Amazon wants to run extra profitable Whole Foods stores so that it earns a high return on investment.
"A comprehensive analysis of productivity in each department will likely show clear evidence that apparel should be abolished entirely in every store. Vitamins and minerals, while high margin, will also likely be eliminated or drastically paired down from all stores given WFM's drastically higher price positioning in these categories. In the key SKUs [items] that remain, we expect to see drastic price reductions."
More of What's Trending on TheStreet:
- United Airlines Will Feel Hurricane Harvey's Impact - How Brutal Will It Be?
- European Supermarket Stocks Extend Declines After Amazon Cuts Whole Foods Prices
- Here Are the Benefits Amazon Prime Members Will Get at Whole Foods
- Amazon Will Leave Carnage as It Steamrolls Through Grocery Industry
- Apple Stock Upgraded at Cleveland on Strong Demand for iPhone, HomePod, Watch