UBS: Amazon is throwing a pile of cash at Whole Foods to turn a profit - which could come sooner than you think (AMZN)

markets.businessinsider.com | 9/13/2017 | Seth Archer
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What's the first thing you do after you spend $13.7 billion on a grocery store known for its high prices? Well, if you are Amazon, you slash those prices on the first day you gain ownership of the stores.

With a huge $21.451 billion bundle of cash (and cash equivalents) on its balance sheets, Amazon can afford to lose a bit while it cuts prices at Whole Foods in order to make its newest acquisition more popular. But, Amazon isn't looking to take a loss forever.

UBS - Amazon - Plans - Grocer - Conversation

UBS discussed Amazon's plans for the high-end grocer in a conversation with an unnamed former VP of Amazon Fresh: "Contrary to public perception, he noted Amazon is not looking to be unprofitable in this category, though they are not afraid to invest in the near-to-medium term to drive the flywheel around price, convenience and selection."

The decision to buy Whole Foods was a "build vs. buy" decision for Amazon, according to UBS. Amazon is looking to wedge itself into the consumable goods space, aka food stuffs, and Whole Foods was a...
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