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CNBC reports that Amazon's $13.7 billion bid for Whole Foods, if it is successful, could "have a bigger impact on food retailers than Wall Street has been discussing" because it has "triggered a reaction in the market-perceived credit quality of many of Whole Foods' peers."

An analysis from S&P Global Market Intelligence said that "the average one-year probability of default for the U.S. food retail industry, as measured by S&P, immediately jumped in risk after the acquisition was announced ... The median one-year probability of default for what S&P has classified as food retail companies was 3.73 percent on June 15, and it heightened by 14 percent to 4.26 percent on June 16, S&P Global said." June 16, as it happens, is the day that Amazon's bid for Whole Foods was announced.

This all matters, of course, but it cannot be the stuff that retailers focus on. Instead, they have to focus on the customer - figuring out what they need and want, what the pain points are, and working hard to address these issues. The default they have to worry about is when consumers see them as being irrelevant to their lives. That's a default from which it is almost impossible to recover.

The Wall Street Journal reports that one of the results of Amazon's bid to acquire Whole Foods has been a move by various grocery delivery services to acquire new bricks-and-mortar retail customers.

"The stakes are all the higher for companies such as Instacart Inc., Peapod LLC, Shipt Inc. and FreshDirect LLC to deliver not only fresh food—but continued growth," the Journal writes. "Midwestern grocery chain Schnucks Markets Inc. (was) expected Thursday to announce its partnership with Instacart for online delivery will extend to most of its 100 stores by next month. Ahold Delhaize’s Peapod is expanding its push into New York City, a key market, after spending more than $94 million on a warehouse in Jersey City, N.J., in 2014."

Meanwhile, "Shipt, which delivers food orders for retailers including Costco Wholesale Corp. COST -0.93% , Meijer Inc. and Whole Foods, intends to almost double its markets by next year, from 51 to 100. Founder Bill Smith says the company’s expansion is targeting suburban customers in less saturated regions like the South and the Midwest to gain an edge."
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