© Mohamed Ahmed Soliman | Dreamstime.com - Whole Foods Market logo

The $13.7bn purchase of the Whole Foods grocery stores by Amazon has been a seismic shock to the business world. Many wonder what the deal means for the grocer’s current e-commerce fulfilment partner, Instacart, but this analysis from Stratechery suggests the implications run far deeper. There is a long game at play here, and a distinctly “Amazonian” one at that.

“Today, all of the logistics that go into a Whole Foods store are for the purpose of stocking physical shelves; the entire operation is integrated. What I expect Amazon to do over the next few years is transform the Whole Foods supply chain into a service architecture based on primitives: meat, fruit, vegetables, baked goods, non-perishables (Whole Foods’ outsized reliance on store brands is something that I’m sure was very attractive to Amazon). What will make this massive investment worth it, though, is that there will be a guaranteed customer: Whole Foods Markets.


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