whole foods doesn't.f i want to get my cheerios and my produce, what kind of soration centers do they need in urban areas and suburbs to get all those things to me in a way that makes me happy? it's going to be expensive and i'm not sure investors are trading on that extra expense right now. it's going to take time. >> overlap amazon prime users and whole foods users for sure so it will be interesting way to see amazon get whole food to move, more high end and techy or more mass market that's the $13 billion question. >> finally, scott, people are talking a bit about what allowed amazon to be this impactful. one theory is if it hadn't been for web services that that really did change everything for them and it's going to -- it will mean we're in an environment like this one. you agree? >> sure. well, what is provided them is a growth vehicle and cheaper stock to do things like this or ten things for every other company is able to do. but you're literally -- if amazon are the white walkers and grocery was

now, it's all about food as amazon looks to buy whole foods for $13.7 billion. kroger, costco and walmart are plunging on that, but so are packaged food players like general mills, kellogg, kraft heinz and campbell soup all down at least 2.5% a piece the only stock firmly in the green within the sector, whole foods. for the week staples are now the second worst performer behind tech before today they were still positive on the week so with that let's send it back downtown to the team of "squawk alley. guys -- >>> morgan, thank you very much. good morning, it is 8:00 a.m. at amazon headquarters in seattle, it's 11:00 a.m. on wall street and "squawk alley" is live ♪ >>> good friday morning. welcome to "squawk alley." i'm carl quintanilla with jon fortt, sara eisen at post nine of the new york stock exchange obviously our top story of the day is amazon buying whole foods for $42 a share. the deal valued at $13.7 billion. it's amazon's biggest deal eve

>> i will switch over, i love whole foods food, i think it's better than fresh direct. the stock went up, so they absorbed it for nothing. it looked like a great deal. >> the stock went up a lot, actually. good luck. we'll keep you posted on how that works. >>> that's "nightly business report" for tonight. i'm sue herera. thanks for joining us. have a great father's day weekend, everybody out there. we'll .

back to our top story, amazon buying whole foods. it is a blockbuster deal. sparked charter on -- sparked chatter on how food tech and delivery startups will be impacted by this megadeal. the acquisition comes to weeks after blue apron filed for a $100 million ipo. joining us is bob o'donnell and our reporter. bob, i want to start with you. you have so many businesses vying for a piece of this market. how does this deal change the game? bob: it dramatically reshapes everything. you have a behemoth that makes all the little players look a lot smaller still. you have the ability and reach amazon has. there are a lot of interesting synergies between amazon and whole foods and what you can do. all of a sudden, it becomes very interesting. when you throw in the amazon wand dash device where you can tie that into your shopping as well, they have a very interesting angle that changes the nature of how we think about groceries. i think that makes it really tough for the little guys. emily: instacart is a big competitor to amazon fresh. they have a partnership with wh

whole foods would complement their business, but whole foods has morganlander in intermix.nk that helps them broaden the reach. i don't think they really need to eliminate brands to make this a success. amazon is about building brands and bringing brands into its business. it's really a portfolio of brands, whether it's national or private that will sell. vonnie: do you see any regulatory problems or challenges here? poonam: no. amazon is only going to get bigger with the acquisition, but the food business is very fragmented, so whole foods is a small piece of it. it's not the entire business. i don't for see any regulatory issues. vonnie: of the directors they locker,board, foot morningstar, sharon mccomb of best buy come up in arab red -- panera bread is also on the board. what do they move on to next? other over the -- are there other problems they want to get into? good asyour guess is as mine. there's lots of interesting places to help turn around, that they can go to if it's used to. the retail was changing today, and it needs leaders to help drive the change. to poon

amazon looking at whole foods, to buy whole foods market.et at $42 a share in cash. they're hoping to buy the ,ompany, $42 a share in cash this cannot out in the commercial break. >> when we found out, i said it was going to be amazon. >> jonathan called it. >> this is a big, big push into the food area. >> amazon has made no secret of the fact they want to go into this. they want to deliver on groceries, so this would be a big set up, even as we saw, hit hard. other groceries are having a tough time. below whole at $33 $33 a share is where we close yesterday, $42 a share in cash is the price from amazon. >> and walmart has been putting a such big push into groceries. >> we had someone come on the other day and said that jeff bezos over at amazon would not be happy with a push in to area, and that is exactly what has happened in here, isn't it? >> it is a war for our groceries? bezos has shown in the past he has the cash that going to spend -- and is willing to spend. so whole foods going to be bought by amazon yesterday at $42 a share in a

interestingn relationship with whole foods. s positioned itself as a competitor to amazon in the space of groceries and has a five-your partnership will foods, who is actually an investor in the company. put $30 million into this startup that is now worth $3.4 billion. i imagine the it's the cart -- scratchingt ceo is their head wondering how they fit into this. they were not expecting this to happen. it sounds like they were blindsided for this -- blindsided by this as well. emily: if you are and amazon customer, how does this change the experience for you? if you are walking into whole foods, how does this change the experience for you? brad: this will not change everybody's life. whole foods is largely in irvine, high income areas. there is a nice overlap with prime and repeat amazon customers. i think it is the amazon prime or amazon fresh customer another option. not just home delivery, but go pick it up in the store. order a subset of your groceries online and then go into a whole foods store to sort through the fruits and

they upgraded whole foods and slapped $48 target on it up from $40. they are in your camp where they see a potential new bidder let me go back to sara's point do you think, and i don't want to put you on the spot legally, i have questions i do believe this will be looked at by regulators because of amazon prime do you think the deal could be blocked? what happens to kroeger? kroeger is down 30%. i wonder if amazon really wanted bigger distribution. they could get kroeger for about the same price, maybe more, but get six times the number of stores >> i think from a regulator perspective amazon doesn't disclose grocery sales but saw low market share i don't see grounds for stopping of competition from a kroeger perspective, to the extent that amazon comes in and drastically lowers all the prices in whole foods, that would have an impact on kroeger. they may need to be more aggressive on the pricing front. pricing is the key concern out there and that's what's driving all the grocers down >> and just to add to your point, brian, on that barclays note, th

it's all been an experiment they will apply these technologies whole foods. declining foot traffic, for the work is cut out for them. but never been against jeff bezos and his team. mark: andrew., let's use this chart as a sounding board. this tells the whole story. few, tesco,bottom sainsbury, ricardo, the company that's not in their is almost interesting. william morrison. what does it tell us? they have to deal with supply of goods to amazon in the u.k. if they bought whole foods in the states, are they going to do the same thing in the u.k.? and morris already has a link with amazon, so that someone investors seem to be betting on. vonnie: back to tom keene, you mentioned janet yellen for have some incentive to do with this deal and i know you meant one thing. can i tell you what deutsche bank just told us, he just told us that this deal is fascinating because it may in fact add to the deflationary pressures in the u.s. tom: i will take it on a metro -- macro basis. you have the pricing and the idea that they can negotiate down basic processes, which reall

. >> i joked amazon has to rebrand itself as whole life because whole foods is going to stay whole foods, but amazon's just taking over everything >> it is >> let's see what regulators have to say. thanks for watching. check, please starts next. >>> hi, everybody, welcome to the closing bell on this crazy friday i'm kelly evans. >> i'm mike santolli in for bill griffeth, who is sorry to miss today. amazon, of course, shaking up the grocery space with a purchase of whole foods, look at implications of the deal, what it means for investors and customers. >> note never been longer this morning. >> so many angles. >> back to what they were saying, never has a deal like this had so many ramifications getting through as many as we can. it's a jam-packed two hours. why niles shorts amazon on the back of the deal, and former walmart ceo, bill simon, why walmart has more to worry about other than amazon. bill miller, a bull on the stock, and talking to him about valeant, and alexander accosta reacting to president trump's comments on cuban policy >> let's get to it we have details of the amazon's

this is getting, while. >> jeff is a genius, but whole foods is basically a mental hospital that sells food. it's like the nuttiest place in the world. there's not one delicious -looking or tasting thing in the whole thing. >> one oh. >> i thought it would make money he is a genuine genius, he can make it work. [inaudible] >> the food, it is a big. >> or three musketeer, is not diet coke, it's not the stuff, man is meant to live on big macs and diet coke. >> they have really good meat and ask what produce. i love whole foods. >> i knew you would. >> nothing has flavor there. i digress. >>hey have good imported italian stuff. >> obvioly we caargue over the qualitof the stuff they have, but having said that, if you think about what he is doing here, this is the reverse of what he built. or is it. what am i missing? you're saying because he is buying these physical grocery stores. >> right and he's buying these other stores coming you can walk in and pick up what you want. >> we've taken the added -- >> it's in addition to the e-commerce still because guess what, you can go into these doo

amazon is buying whole foods. amazon is up 30 bucks at 995. whole foods at 41.98. market, probably with some heavy discounting, the other geese in that sector, the big retailers, the grocers, they have lost $55 billion from their capital, their value, okay? look at them go down. supervalu, 13%. kroger 12%. sprouts, farmer's market. target down 8%. target as well. walmart down four bucks. national grocers, et cetera, et cetera down 3%. the story amazon want to take over grocery and the grocery existing establishment is way, way down. joining us lenore hark kins. -- hawkins. lenore, this seems like a huge play by amazon to literally grab hold of another big chunk of the retail industry. i think the market says they're going to do it. what says lenore hawkins? >> i think it was inevitable they did this they have been moving more and more into grocery particularly with the amazon fresh and this made a lot of sense because it is a lot better to buy the asset than to build it themselves. they can leverage existing stores and whole foods existing warehouses. it is pretty m

of course, that is whole foods and amazon. amazon buying whole foods are $13.7 billion.aul sweeney, a bloomberg agent, says amazon has been wanting to get into the grocery space. they have certainly done that disrupting not just whole foods, but many other retailers plunging on the competition, this massive threat from the 800-pound gorilla. our chart shows amazon is up in . big way on the year walmart trying to trade higher but starting to sad within both kroger and target down sharply on the year, talking to the fact that the grocery store space is already tough without amazon. joe: thanks, abigail. for more, i want to bring in bloomberg deals reporter ed hammond. thank you very much. >> this is a pretty serious offer from amazon. there has been some noise around whole foods for a while, that someone may come in. there has been some speculation. i think you could potentially see someone come in just to stop amazon getting it. the other grocers have been crushed on the back of this because amazon is kind of -- a guess the expectation is they come in and disrupt this who

not the consume bable business for amazon is something they're going to recraft and those stores whole foods aren't as useful, so why not tesla because it's not going to be anybody else >> brian kelly >> i'm going to go with target here it's more just a foil the whole plan i think that's part of the thesis is that a lot of these players are going to be defensive about this and try to keep jeff out. i agree with tim they're unlikely to do that. they don't have the financial backing or the ability that amazon has, but i'd say target should get in there and be a troll. >> steve grasso. >> i think it's a defensive move i would think costco has to do something to try to off lay some of their membership weakness i think it makes sense for them to do it, but ultimately, i think it makes sense for wall mrt to take them out even though they say no, maybe they're playing is >> why did you put walmart >> they said they weren't interested i think costco has to get in there, but something to think about. what about starbucks makes your scratch your head a little bit there >> small little white board. >>

deflation, the fact that amazon plans to lower whole foodmation and the impact on the work force. what do you think about it, jeff >> the bigger, broader issue is that technology is about low lowering prices. you're seeing a curve flattening, interest rates on the long end going down even as the fed is increasing rates. last week we saw a cpi print, which was in third week print. so to put the walmart -- that was a mistake. to put the amazon news in conte context, it's really about a macro force that is lowering prices and that's something you've seeing in the bond markets as well >> so is that what dudley means this morning when he says a flat i don't knowing curve is is not necessarily a negative >> i think that's part it have he had some comments out this morning. you're seeing it again in the curve in terms of curve flat i don't knowing that's bringing back into the market some expectations around -- the fed is going to continue to proceed along its path of normalization for the front end but the longer end market moves are still reflect

at the same time whole foods has had a hard time with the loyalty program. amazon ask just one gigantic loyalty program. if it wants, it can harness uber you know that uber has about $3 billion in delivery food buyers. and whole foods, no reason not to hold on to this if you own it, you hold it i think there's very little possible of antitrust action, it's a very fractured industry, justice department won't spend much time on this, who knows, maybe whole foods decide decided ---amazon decided it had to buy whole foods people feel walmart's got to come in. other than that, let me think, no, no other winners, losers all right, you have to start with a highly leveraged supervalu. next is kroger that has an expensive unionized workforce. i didn't see how kroger could compete yesterday, after that downbeat rap about all the companies taking the share then there's target, this company's been struggling with food as it is. you have to wonder if it should even bother now. but maybe it can, and i'm not kidding, outsource food to kroger suppliers to whole foods will be

options activity exploded and whole foods today off the chart. the stocks saw more than 70 times its daily average volume options super hot as well. pretty much all centered right around that $42 mark but the nature of the volume might suggest traders are betting against the notion of a bidding war. obviously very complicated so let's break it down. mike, you know, based next door to whole foods you live in austin >> i do. >> what's the options take >> well, first of all let's talk about something fundamentally first. it's interesting to me, whole foods was a company that was everybody was wondering whether they were going to get their mojo back and as soon as amazon comes back they're saying they underbid this was a company that was looking at mar john compression, a lot of competition from conventional grocers what was going on, it's conventional to see this in takeover situations. what happens is they come and try to squeeze the last bit out of the stock they get into buy rights the reason is they're backstopped. stock is not going to go a who

right i don't think he wants to change anything for some period of time that, again, if you view whole foods as though they were amazon's largest customer in the food category, then in that context, you don't want to mess with them. you want to let whole foods be exactly what it is today because it has, you know, it has enormous brand appeal. fraen amazon's point of view, right now what they need to do is create the equivalent of aws to service that. there is no reason to mess with the formula at all and all these people are talking about distribution centers maybe that comes some day. i don't see that in the near term at all and i don't see that as being strategic to this transaction. to me the strategy is about viewing food as one of the largest categories in the economy and whole foods as the first best customer to learn and develop all the infrastructure necessary to shoupport every otr customer in that category. that is really defensible. >> so what you're saying roger and john maybe i'll pose it you to, makes me wonder about amazon's ambitions on apparel. they haven't really reached cr

this has to do with amazon buying whole foods. those are two winning stocks within those sectors. "is up 28%. up 28%. foods is investors think there is very little deal riskier. cannotimer saying you avoid the fact that there is suitor coming in. retailers down sharply. no industry is safe. retailers everywhere should be shaking in their boots as amazon is getting into the grocery store market. discretionary,er the worst action is nike down to the second day in a row, the worst two-day slide since march. rating from neutral to overweight. this is likely to get worse than better. makin nike slid sharply after reducing their sales force by 2%. taking a look at some of those technology laggers. , he stopshabet, amd have not been -- these stocks have not been down quite as much. we will see if they selling gets worse later in the day. vonnie: never a dog moment thanks to abigail doolittle. those agreed to buy all in -- whole foods in a $13.7 billion deal. is this good for the stock market overall? we have been looking into that question. what is your conclusion, all of our? -- oliver?

job cuts at whole foods, price cuts at whole foods. what can you tell us?denies the job cuts, but we have sources that say that will happen. the amazon style has been to do things at a very low margin. as bad as grocery margins are, whole foods has about a 5% operating margin and amazon is worse. the focus for amazon is very different, but amazon's overall profit margins are below 2%. they want lots of cash flow and use that cash flow to reinvest in their business. the very thing that whole foods shareholder activists are looking for. increasing operating margins, don't look for amazon to do that. emily: coming up, airbnb rolling out a new feature to combat the global refugee crisis. we hear from the cofounder, next. this is bloomberg. ♪ ♪ emily: airbnb is outlining an ambitious plan to use its platform to help refugees and evacuees around the globe on its new open home platform. the goal? to find housing for 100,000 displaced people in the next five years. we heard from an airbnb host from denver who hosted several refugees. she explained why she signed up

job cuts at whole foods, price cuts at whole foods. what can you tell us? amazon denies the job cuts, blue we have or the -- have other sources -- but we have other sources saying that will happen. whole foods is about a 5% operating margin. kroger has about a 2% operating margin. amazon is even worse. the focus for amazon in most of its business lines is very different. amazon's overall profit margins are below 2%. they want lots of cash flow and to use that cash flow to reinvest in their business. they are not looking for the very things that whole foods' activist shareholders are looking for. emily: can amazon dropped the price is sustainably -- can amazon drop the prices sustainably? cory: i think they can. they could run this business just for the cash flow, use that cash flow to expand all of their businesses, the $15 billion a year topline business. the cash flow generated would be about 14% return. that's a pretty sizable return for them to reinvest that business. that's the way they seem to look at cash flow. they don't need a lot of profitability.

jonathan: sweetie, go to the whole foods and get me something? come back with whole foods.talk about what is happening. this is a busy weekend weather wise. brian: it's every afternoon and everything. not all day. there is plenty of time to be outside and time to be good to dad. michelle: looking out for you. brian: we have a threat daily. outside right now the heaviest in the valley. i think slowly overnight it may approach us. we could see heavy rains tonight. head outside and first things first. show you the beach at at rehobeth. it's not the prettiest day at the beach. talk about the beach. if you have plans head to the shore. in the afternoon the temperatures in the 70's. heading to the saturday is in the middle 80's. sunday is middle 80's as well. a threat of showers and storms in the afternoon. watching the radar to the west. light rain. if you head out in the valley well south and west, the flood warning and the watches up through a chunk of the area. this is down toward luray, madison county to the south and west. we are watching this closely. we have had flood rep

at whole foods.hole foods at prices 20% to 30% less than they are now. imagine a mercedes at the price of a toyota. that's what you're about to get in whole foods. scarlet: scott galloway, nyu stern school of business, professor of marketing. from new york, this is bloomberg. ♪ scarlet: it's time for a look at some of the biggest business stories in the news right now. kroger took a big hit last week, losing more than $7 billion in market value over two days. it slid following a weak earnings report. kroger is the biggest u.s. supermarket chain. india's tata group is considering a jaguar land rover ipo. executives have been holding discussions about the potential listing on an international stock exchange. it is said to be weighing london and new york as possible venues. senator elizabeth once again urged the federal reserve to remove 12 wells fargo board members. they held their posts when the bank allegedly set up million of fake customer accounts. warren says the board did "nothing to stop the ram

foods, a whole whopping $13 billion deal. >> this is a company that operates in a space, we know thatvery is so fueled by competition, it's expensive space to operate in because so much of the costs go to marketing. as a land grab for wallet share for customers. it's essentially drizzly for blue apron in that whole foods will now have the logistical empire that is amazon and amazon customers will have more accessible foods. those are the kind of higher-order customers how the top 10% of u.s. households who are willing to spend a little more to get the quality the whole foods promises. that kind of happens to be the same group the blue apron is targeting. i spoke to an analyst earlier today who said they are all fighting for the same wallet share of these high spending customers as can be hard for blue apron to fight down the value chain because folks are not willing to spend 11 or $12 a plate for a box of fresh food that might spoil. blueyou think about where apron's growth is going to be, they are going to have to figure out how to make sure they are the ones nabbing the dollars from

amazon-whole foods deal.ne, we weren't that surprised. look, they had been preparing for battle with amazon for years. all of our previous interviews always had a question about amazon entering the on line food delivery business. and number two, they're always preparing to compete on price. that's how kroger led to the upswing over the last few years. they just slashed profit margins and prices to fight walmart which is doing it again in terms of lowering prices they're prepared to do so again. so from their perspective, they've been in this business for a while. they got the consumer insights they need to understand their consumer they got a growing organic and healthy business i think the question though for investors is nobody really knows what amazon and whole foods is going to look like what amazon is going to do, how it's going to use the data and warehouses and everything else and that has scared a lot of investors. whether kroger can make the case successfully or not, we will see. >> amazon should be

>> i think i'm long whole foods, i'm staying long it's above the target the price of the deal. look at that, i actually do have some thoughts. wal-mart has got to be thinking about this right now for a lot of reasons. >> they are buying upscale things at wal-mart. >> it's too much information >> wearing pants would you prefer the opposite? >> but this is important, though, wal-mart has to think about the strategic issue for them amazon buying whole foods i noe it's little larrious, the pants thing. but the other thing about it, though, a lot of people say this is not a crazy price this is not a price that anybody else can possibly compete. wal-mart can compete can you have other buyers compete. >> we are putting you on the spot wal-mart - >> let me say odd somebody steps in, whether foreign ir, the u.s., i don't know >> nobody else is going to buy this company other than amson. okay >> that doesn't mean -- >> someone else -- >> i will go to "options action". mike ko lives in austin. he probably knows, probably neighbors. >> he's in woods hall. >> on deck, apple making a major p

in the category of grocery for whole foods, whole foods in terms of plus amazon is on the face of groceryess we want to revise all the ways we think of antitrust, it is not likely to happen. >> what about ultimately hurting consumers. that's what antitrust is all about, is it >> my argument at the core is amazon is a given over the last 20 years benefited consumers in count less ways and there is no reason to believe at the end of the day that their ability to move into this channel will ultimately not drive down costs or prices of consumers and increase access to goods >> stacey, it seems like a lot of healthy good quality food can become far more affordable >> amazon is selected of raising prices online. you don't know when you log on at that moment you see data away to show you a place that's not in fact the lowest price and logging access to certain produc products, we are seeing signs that amazon is exercising ways that hurt consumers. you have a company that has a monopoly online. >> you made that line at the beginning. unfortunately, we have to pay the bills and we have to cut you

amazon bought whole foods for the equivalent of approximately three days worth of food from whole foods. so that big business news is on the minds of many. thank you so much for talking with us and tweeting @ktvuthe9. let's talk about this heat wave moving in here. 100-degree temperatures rosemary for all those folks inland. it's doing to be a hot one. >> yes, it is. this pattern will stick around for the next several days. get used to it. gear up. we have warm weather inland coming our way. giving you a look at what's going on now. temperatures beginning to soar inland, 73 degrees in santa rosa. we have upper 60s in san francisco, oakland, low 70s livermore and san jose. fog along the coastline. everybody else in the clear. and you can see from the 24 hour temperature change, 5 to 10 degrees warmer than we were 24 hours ago. and that will continue as we get into the afternoon. the fog will remain along the coastline. we have a very light on shore breeze and that will keep the coast very comfortable for the rest of us the heat will be on. we have just a bit of an on shore breeze but not

these are areas that amazon -whole foods could help if people get more used to buying their food off this seems to be an ipo at this point, and i will definitely be keeping eye on it. emily: we have new reporting out about how this amazon whole foods will work. job cuts in price cut the whole foods. what can you tell us? cory: amazon denies the job cuts, but we have sources that confirm it. as bad as grocery margins are, whole foods has about a 5% operating margin and amazon is worse. the focus for amazon is very different, but amazon's overall profit margins are below 2%. they want lots of cash flow in -- they want lots of cash flow and want to use that cash flow to reinvest in the business. the very thing that whole foods shareholder activists are looking for. increases margins. emily: coming up, airbnb rolling out a new feature to combat the global refugee crisis. we hear from the cofounder, next. this is bloomberg. ♪ ♪ emily: airbnb is outlining an ambitious plan to use its platform to help refugees and evacuees around the globe on its new open home platform. the goal? to find ho

the high prices at whole foods will come down. being healthy, organic and way more expensive than your normal grocery store. the stock is getting hammered as investors have been pressured to lower prices. amazon is paying a premium for all the whole foods stock. total price tag of $13.7 billion. up to now, the online giant has been a small player in the $700 billion grocery business. amazon fresh is built on the click and pick model where consumers order to a distribution point. the company has shown a big interest in brick and mortar stores where shoppers pay with phones instead of checking in lines. amazon will bring innovation and efficiency to a company that is lacking both. >> amazon will be deploying technology which will find efficiencies in the business, lowter cost of doing business that and with that prices will come down. >> traditional grocery stores have been hurting. stock prices are down, sales are flat, losing market share to discount grocers. some believe this will only accelerate that trend. amazon plans on keepi

they chose whole foods, why? because they're looking, completely different from the current culture. so there could be a culture clash as a result of that. but if you're looking to diversify yourself, some would say whole foods may be one of the best with organic food election in all of the markets f they're trying to push people out of business, kick butts of competitors that is how you do it. neil: they're still tanking today on that notion all of sudden way we buy food is going to change, is it? >> competition is important. hopefully the other brand took the hit, that will be a kick in the pants to up their game. neil: to be fair to them, same rap that the mom-and-pop stores had with walmart getting bigger and bigger. how do you compete? >> grocery store system is same for decades. we go to the store, put them in a cart, put it in a car. if we could do it online that would be awesome. neil: all food would be shipped home. >> no. i like to feel the oranges or apples, i want to make sure they're fresh. you would

amazon is buying whole foods for $13.7 billion. kevin lewis is outside the whole foods in arlington. this is stirring up a lot of reaction. kevin: a lot of humor, too. one person on twitter jokingly saying and asking if the whole foods meat section will now be referred to as amazon prime. but jokes aside, this purchase could revolutionize the grocery industry. >> there must be some sort of a demographic he is trying to reach. or trying to take over the world. i don't know. kevin: jeff empire will soon include whole foods. >> i'm hopeful. i think amazon and hole -- whole foods will be a good combination. kevin: the deal worth $13.7 billion is expected to close by christmas. whole foods promising to keep its healthy organic brand. austin, texas, headquarters, and no layoffs or store closures. >> someone posted on linkedin today on my feed. i thought c'mon. >> you thought what? >> strategic. it makes sense. it could automate the entire shopping process that could be interesting in a couple of years. kevin: by mid-afternoon news of pur

taking a look at the whole foods-amazon takeover, as the online giant plans to cut whole foods pricings arise as to how the credentials of the food chain will survive. with vernon hill who joins us now. delight to have you. thank you for joining us. let's look at the u.k. first area in you have written a book about how to create growth companies in a no growth world. certainly metro bank has been a fast-growing company. what is no doubt that not growing fast right now is the u.k. economy. we have seen slowdown in terms of gdp as inflation rises. with the economy slowing this year, can you maintain your rapid growth while keeping similar levels of profitability? >> yes we can. our profitability is growing up each quarter and our growth rates are strong. this is a company designed to take market share from the big five banks. it is a disruptor model, changing the way people and businesses view there. while there may be a little slow down in the u.k. market, the becauseor us is so big there is so much market share to take. nejra: you said before you are actively chasing 100% of market sha

these are areas that frankly, whole foods and amazon can help people get more used to bind their food of the internet. this seems to be an ipo at this point but i will be keeping an eye on it. emily: we have reporting about how this amazon whole foods think will work. >> amazon denies the job cuts. the amazon style has been to do things at a very low margin. are,d as grocery margins whole foods have about a 5% operating margin. the focus for amazon in most of its business lines are very different but it's overall profit margin is below 2%. they want lots of cash flow and use that cash flow to invest in their business. the same thing that whole foods activists and shareholders are looking for, -- they: can amazon dropped prophet sustainably. >> if they are willing to operate in a 2% profit margin they could run this business just for the cash flow, use this cash flow to expand all of their -- $15 million a year cash flow business. that is a pretty sizable return for them to reinvest in that business. they do not need a lot of profitability. emily: let companies could amazon possibly ac

amazon buying whole foods. amazon will pay 42 buck per share of whole foods.l expected to close by the end of the year. >>> number two, i am meteorologist, drew tuma. get set to sweat over the weekend. it's warm to hot today and then the numbers really rise over the weekend for father's day itself. a heat advisory goes into affect saturday morning. >>> number three, an uber passenger in san jose has gone public with cell phone video he says shows a driver's unsettling attitude toward women. the driver can be heard making inappropriate comments about drunk female passengers riding solo and uber says that driver is no longer allowed to be with the company. >>> and then memorials continue to grow for the three fallen ups workers and you are looking at one of the tributes in diamond heights. it was a top on the route of the victims. >>> and then cleaning up, crews worked to clear the streets last night. the rally stage and convention center will be taken down today. >>> number six, the traffic is starting to build this friday morning. can you see a little bit slug

mike ko, not only options expert also based, you know, next door to whole food. you live in austin. >> i do. >> that's where they're based. have you the insiders there locally. what do the options take >> let's talk about something fundamentally first. it's interesting to me, whole foods is a company everybody was wondering if they're geming those mojo back, now that alsnot alson comes out, they say they under bid. what was really going on, though it's conventional to see this kind of activity in takeover situations what happens is, risk our players, they come and try to squeeze the last bit of big out of the trade they buy the stock they typically will sell calls against it they get into buy rights the back stuff, stock will not go a whole lot lower, because there is at outstanding bid. so they don't need to look for really high returns, because they view these a very low trades. >> very high level stuff there so back it up a little bit, if i can ask you, not everybody is a pro out there. when you say the risk -- are you talkingistic arbitrage -- talking about t

under the whole foods brand. deal is expected to close later this year. >>> time now 6:27. this morning, the russia investigation intensifies! this morning, we are learning another member of president trump's administration is hiring a lawyer! >>> a new batch of recruits for san jose police and why this could be the turning point for the department. i'm jessica flores with the story coming up. ♪ ♪ ♪ you're not taking these. hey, hey, hey! you're not taking those. whoa, whoa! you're not taking that. come with me. you're not taking that. you're not taking that. you're not taking that. mom, i'm taking the subaru. don't be late. even when we're not there to keep them safe, our subaru outback will be. (vo) love. it's what makes a subaru, a subaru. >>> this morning, we're following breaking news. the russian military says it may have killed the leader of isis. plus -- >> my eyes are stinging, my throated was store. >> a man who helped tried to rescue those in the london high- rise inferno details he spent in the buildi

amazon could theoretically cut prices significantly at whole foods, a company dogged by being called whole paycheck for many years now. the deal with whole foods marks yet another step for amazon into the physical retail world. later this summer here in san jose they plan to open a bricks and mortar amazon books at santana row. in san jose len ramirez, kpix5. >> under the deal whole foods will continue to operate under the same name. >>> americans are going nuts for coconut oil. when you search for it on amazon, you get more than 67,000 results. but tonight a new study says it's not actually good for you. in fact, the american heart association says it may be as unhealthy as beef drippings and butter. that's because coconut oil is packed with saturated fat which can cause bad cholesterol and increased cardiovascular risks. so how does coconut oil get so popular in the first place? well, demand started storming right around the time -- soaring right around the time dr. oz recommended it as a way to lose weight about five years ago. >>> now to an out of this world experience for sure, s

amazon gobbles up whole foods. the blockbuster deal shaking up the grocery world. why it could mean lower prices. >> dirt bikers arrested for beating a lyft driver and one suspect still on the loose. >> this 11-year-old has some serious skateboarding schools. the phenom gearing up to compete in the x game trials. who are these people? the energy conscious people among us say small actions can add up to something... humongous. a little thing here. a little thing there. starts to feel like a badge maybe millions can wear. who are all these caretakers, advocates too? turns out, it's californians it's me and it's you. don't stop now, it's easy to add to the routine. join energy upgrade california and do your thing. announced it is buying "whole foods" -- in what's said to be a 13- point-7 billion dollar deal. kpix ive >>> a major shake-up in the grocery industry. online retailer amazon just announced it is buying whole foods in what's said to be a $13.7 billion deal. kpix 5's len ramirez in san jose with pour on what the deal is going to mean for customers. len. >> rep

expressed interest in this you order your groceries online or on an app in your phone then go to a whole foods lot where there would be a drive thru for you to pick up your food. amazon's gadgets around your home would contribute the convenient shopping with the echo wifi voice assistant speaker you could quickly add items to your shopping list with voice commands.here's another thing amazon could do with all the whole food stores.they could turn them into amazon go grocery stores. so far there is one amazon go in seatle it offers a radical new high tech shopping experienceyou grab an item off the shelf. an app running on your phone, which can stay in your pocket, or purse, knows what you have grabbed. it runs a tally on everything pick up and charges your credit card attached to your amazon account.and you just leave the store. there's no check out. no cash registers. no clerks. no line.. you just walk out..it would take some time. but amazon could build this system throughout the whole foods network.. with your tech report gabe slate kron 4 news. still ahead.. kron four gets their hands dirt

replacing pasta with gluten-free, low-calorie whole foods can even help you lose weight. it's guilt-free pasta, and it really is back on the menu. with just a simple twist, lift off the spiralizer and snap on the food prep accelerator for the fastest slicing and shredding you've ever seen. five potatoes perfectly sliced in just 30 seconds. slice beets, sweet potatoes, onions, and carrots faster and more perfectly than ever before. even make veggie chips for a great crunchy, nutritious lunchtime snack. but it gets even better. just flip the blade over, and now you can shred mountains of cauliflower rice for cauliflower crust pizza or mushroom risotto. shred cabbage for pickled coleslaws in 20 seconds. and use the small chute for carrots, cilantro, and garlic, hot peppers, green onions, and all those things you hate to chop. even slice a leftover chicken breast or steak to top a salad. and how about sunday prep for the whole week done in a frac o a fridge full of vegetables for salads, all kinds of healthy pastas in minutes. never throw out good food again. look -- you could

(pam) and next: amazon buys whole foods....ow the move could soon change the way you grocery shop. amazon is buying whole foods for nearly 14-billion dollars in cash. amazon says, whole foods will continue to operate under that name.. as a separate unit of the company. experts say, the deal shows amazon's growing interest in groceries. today, we talked to local whole foods shoppers ... about what they thought about the deal. and while it might be too early to know exactly what might change... kron 4's tech reporter gabe slate looks at a few possiblities. amazon wants you to think of them first when you think about buying groceries.they have already entered this market with their amazon fresh delivery systemthis is happening now in the bay area amazon prime members who subscribe to the $15 a month fresh service can order groceries online and have them delivered to their home at a time of their cho

maybe has a standalone whole foods as 2% of the u.s. that high >> it's just 2%. >> i'll say this, i think you want to get away from the grocery stocks, think about what amazon did with whole foods, think of a company like macy's, distribution, the brand, the potential to monetize some of that real estate close a lot of it down maybe use it as logistic centers. >> are you suggesting they could also buy macy's? >> i think somebody will buy macy's, do a strategic sort of thing. >> only as distribution, though, right? >> it's a phenomenal brand there was an article in the "wall street journal" this amongsti morning, alibaba implement e-commerce, partner with bricks and mortar retails and implement their logistics and distribution and let them sell more 14% of retail sales was online. >> what's the draw -- >> in china last year, we have less than 10%. if you're a brand, an ex po t-- >> they're losing traffic numbers. the rchb i think costco survives this whole thing, they got the traffic numbers. they've actually been going up, they've actua

something whole foods is not so much. >> i anticipate they should be able to lower the cost for whole foods and to better enable them to keep in that market and to start bringing together some of those great organic places that people like without capturing your whole paycheck. it's kind of a natural expansion to end on business models as i think about moving more to the grocery states. >> i think it will happen whether they are trying or not because people, they will tend to do what's easy and clicking on something on amazon. and it will be so easy. >> reporter: in one sense this is amazon evading the brick and mortar space of wal-mart just as wal-mart did to amazon's online space. >> and then that's good and easy. >> wal-mart took that first step, which was requiring jet.com recognizing their need to move into that space. >> an important thing to consider, whole foods is a publicly traded company. meaning the shares are sold and bought on the stock market. so this done deal may not be done at all especially if another bidder comes up and offers a lot more money. tom vacar ktvu fox 2

higher income shop their shops at costco which means that shopper could afford the prices that whole foodsy listing, so i think this all becomes is it a winner take all? can there be multiple winners and multiple categories? does costco stay competitive in everything but certain food court categories the rotisserie chicken still remain their number one? we to wait and see. >> and fresh fish friday that's my favorite there. >> that's true. >> thanks, court. >> thank you. >>> up next, it's the u.s. versus europe. no, we're not talking ryder cup. we're talking about whether it's best to invest which place across the pond. up next, two bulls "shark tank's" kevin oea'lry and he's not th -- and the other guy, he's not. that was a good tease. >> very. ♪ it's a champagne and models potpourri ♪ on my yacht made of cuban mahogany ♪ gany, gany, gany ♪ watch this rumor confirmed. they're playing. -what? -we gotta go. -where? -san francisco. -when? -friday. we gotta go. [ tires screech ] any airline. any hotel. any time. go where you want, when you want with no blackout dates. [ muffled music coming fr

in san jose kpix 5. >>> and whole foods will continue to operate under the same name. >>> now whole foods stock jumped as you could imagine shares rallied 29% yesterday, not bad. shares picked up 2.4%. meanwhile stocks of other stores went in the opposite direction. tumbling 5%. dropping 6%. and costco saving 7%. >>> americans are going nuts for coconut oil. when you search for it on amazon, you'll get more than 67,000 results. but a new study says it is not actually good for you. but the american heart association, they say it may be as unhealthy as beef, drippings, and bitter. because coconut oil is packed with saturated fat, causing bad cholesterol, increasing cardiovascular risk. how did it get so popular? and recommending it as a way to lose weight five years ago. and now switching gears, vern with your morning sports. >> hi everybody. i have your bay area local story for you. they did come alive in colorado and where no leads is safe. boy, good use of some excitement last night losing three straight. and then in the 5th inning the pitcher. their first home run with a giant. it's a d