Worries over Amazon’s acquisition of Whole Foods have flared up once again, with UK supermarket shares slipping on Friday on the back of news that the upmarket US grocer will reduce prices.
Supermarkets were among the worst performers on the FTSE 100 index following the open of trading in London. Tesco dropped 1 per cent, Marks & Spencer fell 0.85 per cent, Sainsbury’s declined 0.63 per cent and Morrisons slipped 0.5 per cent. The falls bucked the 0.18 per cent rise in the UK’s benchmark stock-market barometer.
Amazon said late on Thursday that it expects to close its purchase of Whole Foods on Monday. In a sign that Amazon chief Jeff Bezos plans to take his famous competitive streak straight into the grocery sector, the group said that it will cut prices on goods ranging from bananas to minced meat immediately after the deal closes.
Members of Amazon’s prime programme will also receive special benefits at Whole Foods, and the Seattle-based e-commerce heavyweight will make Whole Foods products available for delivery in 302 postcodes across London and the South East.
US grocers, who may have more to lose given Whole Foods’s greater presence in its home market, sustained stronger blows after the news was disclosed.
The share-price ructions are the latest incarnation of the ‘Amazon effect’ in which even the hint that the group plans to compete in a new sector has ignited deep concerns among investors. Still, some large shareholders have said recently that they reckon the reactions are at times overblown.
Read more: The Amazon effect convulses a febrile Wall Street
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