Whole Foods Sale Lauded By Wall Street, Chamber Officials

AUSTIN, TX — Even as shares of other retailers took a tumble Friday, Whole Foods stock rose exponentially after news of its buyout by Amazon.

The investment world was hit with a thunderbolt Friday morning after the announcement that Amazon would buy the homegrown grocery store Whole Foods for $13.7 billion. Wall Street reacted positively to the news, with Whole Foods stock rising by 27.6 percent.

The jump in value stood in contrast to others in the retailing industry: Kroger stock dropped by 13.2 percent, while United Natural Foods fell by 15.6 percent. Despite its announcement of a $310 million purchase of the men's clothing store Bonobos, stock in Walmart was down too by 5.4 percent. Also falling was Target, whose shares fell by 8.8 percent.

The Austin Chamber of Commerce issued a statement regarding the sale of Whole Foods, positing the news as positive for the community.

"It’s great to hear that Whole Foods, an iconic homegrown company, will remain an integral part of our local community," the chamber statement read. "This game changing announcement is yet another example of the strong creative culture and talent throughout the Austin region that enables innovative businesses to start, grow, and attract a significant level of investment."

Yet the purchase signals the need for Austin to continue being a city that sparks new industry and job creation, chamber officials noted: "While this move will hopefully result in more opportunities for Austin, we can’t be complacent. To help Austin remain an attractive job generator, we need to stay focused on recruiting new headquarter companies, building venture capital, and helping small businesses grow.”

Tom Ball, co-founder and managing director of Next Coast Ventures, said the acquisition complements Amazon's expansion strategy while giving the Internet retailer an entrée into the brick-and-mortar landscape.

"Austin is a natural fit for Amazon's growth strategy," Ball said in an email to Patch. "The deal makes a lot of sense for a number of reasons, especially with Amazon's local physical footprint already established on the AWS side of the house."

But Ball acknowledged it's unknown just how Amazon will capitalize on its new acquisition, Ball said

"No one is quite sure yet how Amazon will parlay its technology ambitions into existing Whole Foods locations," he said. "However, Bezos surely saw the size of Whole Foods influence in the grocery market segment and felt like now was the time to strike a deal. Austin will undoubtedly be a test market for some of these broader technology initiatives as Amazon extends its reach into brick and mortar."

Tom Ball, above

"Make no mistake about it, Austin is becoming a leading tech center in America, driving AI innovation and utilizing our vast talent base of data scientists that are working on solving issues in health, science and taking on entire industries that have been stagnant and reinventing them," Price said. " Most importantly, I believe this acquisition will bring jobs to Austin and take Whole Foods growth to new heights."

John Price, above

“Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,” Bezos said in a prepared statement. “Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades – they’re doing an amazing job and we want that to continue.”

Photo by Mark Wilson/Getty Images

Related story: Amazon To Buy Whole Foods For $13.7 Billion

Whole Foods was launched in 1980 to eventually become the world's leader in organic and natural foods. The company now operates 465 stores throughout the U.S. and the United Kingdom. From an original staff of 19 people, the company now employs 91,000 workers.

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