Amazon's (AMZN) - Get Report blockbuster buy of Whole Foods Market (WFM) hit supermarket stocks around Europe Friday, as the big grocers realized that what happens on one side of the Atlantic can just as easily hit them on the other.
In London, the top three fallers on the FTSE100 index were supermarkets Tesco (TSCDF) , (down 6.1%) J. Sainsbury (JSAIY) (off 3.7%) and upscale food mart Marks & Spencer (down 2.79%). But Britain's fourth-largest grocer, Wm. Morrison is up over 1%. No wonder: Amazon already has a partnership with Morrison, offering its products through the U.S. company's Fresh grocery delivery service.
Harsha Wickremasinghe, a banker at M&A firm Livingstone Partners pointed out that Whole Foods has nine supermarkets in the U.K.--seven of them in London--which will now be outlets for Amazon.
""This is the clearest indication that Amazon intends to be a serious player in grocery retail--and is a significant wake-up call for grocery retailers in the North America and the UK. It also highlights that Amazon clearly believes that in order to achieve long-term success in the grocery category, it is essential to have a bricks-and-mortar presence," Wickremasinghe said.
"The U.K, grocers have downplayed Amazon's impact on their sector to date, but this latest move should have them genuinely looking over their shoulder."
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