Grocery Chains Plunge Again After Amazon Purchase of Whole FoodsBy
Grocery chains, fresh off of yesterday’s sell-off, are diving once again after Amazon.com Inc. announced the purchase of Whole Foods Markets Inc.
Wal-Mart Stores Inc., which generates more than half of its revenue from groceries, plunged as much as 7.1 percent shortly after the open of trading in New York, while Kroger Co., the biggest U.S. grocery store, dropped as much as 17 percent. Sprouts Farmers Market Inc. fell up to 14 percent.
Amazon’s agreement to buy Whole Foods for $13.7 billion sent shockwaves across an industry that is already reeling from intensifying competition amid razor-thin margins. A price war has weighed on margins while German discount chain Lidl enters the U.S. market.