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Supermarket shares fall after Amazon announcement

Posted: 25 August 2017 | | No comments yet

Supermarket shares across the world have fallen following Amazon’s announcement that it was planning a round of price cuts when it completes its $13.7bn takeover of Whole Foods.

Tesco was hit hardest on London’s FTSE 100 Index, slipping by nearly 2% on Friday morning – while rivals Morrisons, Sainsbury’s and Marks & Spencer all dropped by more than 1%.

Meanwhile French outfit Carrefour falling by 2%. On Thursday, shares in Kroger, the biggest US supermarket operator, had closed 8% lower while Walmart – the world’s biggest retailer – fell 2%.

Whole Foods, which has 460 stores, mainly in the US, will start offering lower prices on a range of products when its takeover by Amazon completes on Monday.

In the UK, where it has nine stores, there will be reductions on organic lines such as avocados, eggs, salmon and kale.

Jeff Wilke, chief executive of Amazon Worldwide Consumer, said: “We’re determined to make healthy and organic food affordable for everyone.”

Amazon also said it would start selling Whole Foods brand products on its website, a move that hit shares in packaged food sellers such as Kellogg. That move will also affect the UK, where AmazonFresh delivers to 302 postcodes across London and the South East.

Experts said the price cuts were in line with Amazon’s broader strategy of sacrificing short-term profits for long-term market dominance.

 

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