Skip to Content

Amazon Seeks Grocery Relevancy With Whole Foods Acquisition

Incumbency has its advantages.

We at Fortune should know. We’ve been publishing the annual Fortune 500 list of largest companies in the U.S. since 1955. Others publish lists of bigness and profitability and market value. But only the Fortune 500, a ranking based on revenues, is synonymous with size and durability and prestige among America’s biggest enterprises.

That gorgeous issue (326 pages in print!) hits newsstands—and our website—this week. It’s a great opportunity to dig into some of the most important companies in the world’s (still) largest economy. Unsurprisingly, tech companies are more than well represented on the list, as well as in our deep-dive stories in the issue.

And the obstacles to challenging an incumbent shine through in Beth Kowitt’s penetrating story about Amazon’s (AMZN) notably tough slog in establishing itself as a powerhouse in the grocery business. Walmart (WMT) steamrolled incumbents in the business a generation ago to become the nation’s biggest grocer. Amazon, which has boldly challenged Walmart in a retail slugfest, has had far less success in the grocery segment. The competitive beast from Seattle, it turns out, excels at selling non-perishable goods. When freshness is imperative and the merchandise can’t be warehoused, Amazon has struggled.

This explains Amazon’s purchase of Whole Foods. Kowitt has sparkling examples of how Whole Foods give Amazon a shot at grocery relevancy and doubles as a real-time laboratory for Amazon’s technology ideas.

Whether you’re a challenger or an incumbent yourself, this is a story that’s worth a read.