Market Insider

Amazon-Whole Foods threat wipes out nearly $40 billion in market value from other companies

Key Points
  • Amazon's $13.7 billion bid for Whole Foods is seen as highly disruptive for retailers, food companies
  • 20 of the biggest losers in retail and food sectors lost approximately $40 billion in market cap by Friday afternoon.
  • Cowen says Amazon could be the third-largest grocery retailer by 2021.
Amazon-Whole foods $13.7 billion deal rocks the stock market on Friday

Amazon is spending $13.7 billion to buy Whole Foods, but its damage to the stock market has already been in the tens of billions.

Just among the biggest losers in the retail and food categories in the S&P 500, the market cap destruction for just 20 stocks was $37.7 billion Friday.

Amazon has been an unparalleled disruptor for the retail industry, and the fact it is now turning its focus to groceries has sent a chill through a whole new category. Even the food companies supplying the stores have been slammed.

Cowen analysts say the grocery business breaks down into three categories and Amazon is attacking all three. Perishable food, like meat and milk; non-perishables, like cereal, cereal and pasta, and consumer products, like baby products, dish detergent and shampoo.

The analysts said Amazon will likely be ninth largest retail grocer in 2017, but by 2021, they expect it to be No. 3 three behind Wal-Mart and Kroger.

Top S&P Losers in Retail, Food June 16

Source: Gina Francolla, CNBC Data Group

Watch: Amazon's WFM buyout will change food landscape

How Amazon's Whole Foods deal will change the US grocery business