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Jun 19, 2017  

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Wal-Mart Stores Inc said on Friday it would buy online men’s fashion retailer Bonobos Inc for $310-million, in its fourth e-commerce deal in under a year, as it seeks to bridge the gap with e-commerce leader Amazon.com Inc. However, Wal-Mart’s shares fell about 7 per cent to $73.65 in morning trading after Amazon unveiled a $13.7-billion deal to buy upmarket grocer Whole Foods Market Inc. A slew of other retailers’ shares also fell on the news, including shares of Kroger Co, Target Corp and Europe’s Tesco Plc and Carrefour. “When Amazon is serious, frankly, there is no limit to what they can do in terms of disrupting the space ... essentially relegating everything that currently exists in the business obsolete,” said David Tawil, president of hedge fund Maglan Capital. Amazon’s deal to buy Whole Foods comes as Wal-Mart is engaged in a price war with rivals such as Aldi and Kroger in the grocery segment, which makes up about 56 per cent of Wal-Mart’s revenue. Amazon’s move only adds to the pressure on Wal-Mart, as over time, the convenience and grocery delivery offered by the e-commerce giant would likely cut into Wal-Mart’s sales, said Ken Perkins, president of research firm Retail Metrics. However, analysts said other retailers such as Kroger would be hit harder by Amazon’s latest bet. “Wal-Mart has prepared for this day,” said Michelle Grant, head of retailing at Euromonitor International.

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