Amazon is planning to acquire Whole Foods for $13.7 billion, but if it really wants to shake up the grocery sector, it should consider buying discount stores, according to one analyst.
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This could be Amazon's next big acquisition (AMZN, DG)
Amazon plans to acquire Whole Foods for $13.7 billion, what's next?
retail analyst Chuck Grom wrote in a research note Friday.
The Whole Foods acquisition gives Amazon the ability to attract customers that it already has, Grom wrote.
The majority of Amazon Prime members earn an annual income of over $100,000. Whole Foods appeals to a similar demographic.
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To go after a larger portion of the population, Amazon needs to look at buying discount stores, Grom said.
Amazon and Dollar General did not immediately respond to a request for comment.
At the beginning of June, Amazon announcedreduced Prime membership rates
Both Amazon and Walmart have increasingly made efforts to attract both high and low income earners. As the gap between wealthy and poor Americans widens, the middle class is becoming less of an appealing target for nationwide retailers.
According to a study done by the Pew Research Center, between 2000 and 2014, middle-class populations decreased in 203 of the 229 metropolitan areas.
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Today, it's the retailers who are able to cater to these two groups that have seen success.
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