Supermarket shares tank after Amazon's Whole Foods game-changer
Last Friday was a great day to own shares in Whole Foods (NASDAQ: WFM) and an unfortunate day to hold stock in pretty much any other supermarket retailer in North America or even Europe.
The impetus? If you haven't read the news by now, e-commerce behemoth Amazon (NASDAQ: AMZN) entered a definitive merger agreement to acquire Whole Foods US$13.7 billion, representing the biggest bricks-and-mortar move by the online giant to date.
In response to the US$42 per share offer (which is a 27% premium), the Whole Foods share price closed even higher than that at US$42.68, while Amazon's already astronomical stock also rose 2.44% to US$987.71.
For listed supermarket chains in North America the market response was harsh.
Walmart (NYSE: WMT) shares dropped 4.65% to US$3.67, Costco's (NASDAQ: COST) price fell 7.19% to US$167.11, Kroger was down 9.24% at US$22.29 (NYSE: KR), and Supervalu's (NYSE: SVU) shares fell heavily at a rate of 14.36% down to US$3.22.
Other affected retail stocks in the U.S. included Walgreens (NASDAQ: WBA), which fell 4.99% to US$78.44, and Target Corporation (NYSE: TGT), down 5.14% at US$52.61.
The effects were also felt across the border in Canada with Loblaws (TSE: L) shares down 3.58% at CAD$72.79 and the Metro Inc (TSE: MRU) price falling 2.9% to CAD$43.16.
Reactions varied with listed retailers in the U.K., but the nation's biggest supermarket retailer Tesco (LON: TSCO) could be described as an indicator with a 2.37% share price drop to £175.69.
The impact on Sainsbury (LON: SBRY) was more pronounced still at 4.08% down to £251.68 per share, while the falls at Morrisons (LON:MEW) and Marks & Spencer (LON:MKS) were minor, dropping at 0.59% (£238.49) and 1.88% (£345.20) respectively.
On the European continent, Netherlands-based Koninklijke Ahold Delhaize NV (AMS: AD) - which also has stores in the U.S. - took a hit, falling 9.53% to €1.76 per share, while France-based and globally active Carrefour's (EPA: CA) share price was down 3.22% at €22.54.
At the time of writing it is yet to be seen how the markets of Asia, Australia and New Zealand will react to the news on Monday morning, or whether North American and European retailers could see rebounds then as well.
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