Analyst Says Whole Foods Competitors Are ‘Screwed’ After Amazon Deal – Forbes

Whole foods is poised to tower over the competition, analyst says. (Photo by Joe Raedle/Getty Images)

Last week we learned that Amazon is buying Whole Foods in a deal that’s valued at $13.7 billion, and we’ve heard from analysts about how this will affect retail in general; low-priced grocers like Walmart; Amazon’s current grocery delivery services; Whole Foods itself; and even cashiers.

But what about smaller natural-grocery rivals like Sprouts, Earth Fare and Fresh Thyme? In an article here on Forbes.com in 2015, it was reported that Whole Foods was “losing market share to aggressive rivals like specialty retailers Sprouts Farmers Market and Fresh Market.” Will this move turn the organics-laden tables?

“I think competitors like Sprouts, The Fresh Market, Fresh Thyme, Earth Fare and Natural Grocers are totally screwed,” says David J Livingston, owner of DJL Research, which provides market research and competitive intelligence for the grocery industry. “They are not that good to begin with. Trader Joe’s is the undisputed sales-per-square-foot performer. Then comes Whole Foods. All the rest are distant also-rans.”

Livingston points out that most of these chains have seen it coming. “Lucky’s sold out to Kroger. The Fresh Market sold out to a private equity group,” he says. “If they’re under-performing now, just wait until Whole Foods is able to tap into the buying power of Amazon and access their distribution network to lower delivery costs—and Amazon gets access to over 400 prime retail spots. All those Whole Foods wannabe chains mostly have B and C locations and are up to their eyeballs in debt.”

In a press statement, Michelle Grant, Head of Retailing at Euromonitor International, predicted that regional and middle-market grocery retailers will suffer the most—but also noted that this is nothing new. “The higher end grocers and low end grocers have done well at the expense of the middle,” Grant says. “Market exits and consolidation have been happening and this is likely to speed up.”

I’ve been a journalist and content marketing writer since 1997, and am the author of Commit: How to Blast Through Problems & Reach Your Goals Through Massive Action. Visit my website here.

Analyst Says Whole Foods Competitors Are ‘Screwed’ After Amazon Deal – Forbes

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