NEW YORK (AP) — Even before Amazon said it was buying Whole Foods, the grocery industry was scrambling to adapt to changing habits. Now the deal will likely quicken those efforts.
Amazon’s planned $13.7 billion acquisition of the organic and natural foods grocer signals a massive bet that people will opt more for the convenience of online orders and delivery or in-store pickup, putting even more pressure on the already competitive industry. Though online orders are estimated to account for just 1 percent to 2 percent of grocery sales, that figure is expected to grow.
It’s not yet clear what specific changes are in store at either Amazon or Whole Foods, since the two companies are saying little about their plans. But to stay prepare for the threat of the combined company, grocers will likely speed up plans to make their stores more appealing, leverage locations to offer delivery and do a better job of collecting shopper data. They may also need to seek innovative partners of their own.
Here’s a look at the changes that are expected to accelerate.
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Grocery shopping is likely to get more sensory, as retailers try to make stores a draw beyond just picking up staples.
Kroger Co., for instance, has touted the opening of Murray’s cheese shops in some locations. Whole Foods, a leader in redefining the modern grocery experience, offers a “produce butcher” at a recently opened store in New York City.
“I think retailers are going to have to bring a lot of excitement to the store,” said Stew Leonard Jr., CEO of Stew Leonard’s, a grocery chain with five locations in Connecticut and New York.
Leonard noted his chain is known for free samples and costumed farm animals that walk around stores and greet shoppers. But he said he’s looking for ways to modernize elements of the “show” his stores put on — such as the singing animatronics — to…