Amazon's announcement that it will buy Whole Foods, the upscale grocery chain, for $13.4 billion has led to widespread speculation about how the online retailer will shake up the food retail industry.
Will Amazon decimate traditional supermarket stores, like it did with brick-and-mortar booksellers? How will a high-priced supermarket chain, like Whole Foods, fit into Amazon's attempt to sell consumer goods online for the lowest price, like Walmart does? Is this even a profitable move for the company?
After all, Amazon has been trying unsuccessfully to break into the grocery industry for 10 years. It launched AmazonFresh in Seattle in 2007 to see if it could persuade consumers to buy bananas online the same way they buy toothpaste online. While AmazonFresh has expanded to Los Angeles and San Francisco, it hasn't really caught on across the country.
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Meanwhile, regular supermarket chains have been experimenting with online sales and delivery, such as the Peapod service from Giant. Online-only grocery providers, such as FreshDirect, are also trying to win the market. None of them seem to have found a successful formula. But there's a reason they won't give up: Whoever gets it right will make a ton of money.
Here are three recent trends that explain Amazon's decision to push further into the grocery world.