In what I think is a pretty big deal, Amazon is planning on acquiring Whole Foods and getting solidly into the brick and mortar business. Is this going to jumpstart the Amazon Go unstaffed store system in any way? At present, they’re saying that they plan on leaving Whole Foods alone (no change of brand, CEO, HQ) but who knows what the future holds.
As a Canadian, who lives in a province with no Whole Foods, I hope that this helps push their international expansion forward a bit. But, knowing how slow Amazon has been to get things up and running at Amazon.ca, I doubt it’s going to change a thing.
I didn’t even realize there was a Whole Foods just an hour away from me. I don’t think I’ve ever shopped there before.
This does seem like a pretty big deal. The store seems to be struggling a little from the article you linked (from what I skimmed) so I wonder what Amazon’s big plan is to dominate Wal-Mart (which there are like four within an hour of me, that I know of).
Amazon stock is up 3.3%, which is almost unheard of for the company spending that much money. That also bumped their market cap up almost $14 billion. So they basically got Whole Foods for free
Other retailer stocks are plunging. Target down 6%!!!
Incredible. Amazon investors have never ceased to amaze me. They have such faith in Bezos’ ability to turn on the growth and profits at will. I can’t say that he’s let them down, as of yet, but I remain slightly skeptical. Even as I continue to increase the amount of items I order through Amazon Prime on a weekly basis…
I wouldn’t be surprised if it weren’t as much a way to jumpstart the Amazon Fresh/Pantry logistics operation by giving them access to a whole bunch of grocery warehouses and trucks, as well as a supply of goods to sell online. They did a similar tie-up with Morrisons here in the UK, but without buying them.
Whole Foods was just in the midst of a downward spiral as many other chains have stepped up their quality / organics / fair trade selection at lower prices.
Amazon will probably bring in lower prices and tech / online factors to Whole Foods at just the right time to turn it around.
Amazon is like the definition of a Plague Inc strategy. I expect when everything comes tumbling down Amazon’s “destroy everything with 0 profits” will be a not insignificant factor.
That was my first take too, but when you think about it there are tons of distressed grocery chains much more widespread and downmarket than Whole Foods. That’s what’s constraining Amazon’s grocery delivery business, the fact that the USA is just frickin’ huge and given the nature of perishable foods you can’t really do regional warehouses, you need local ones.
The thing about Whole Foods is that it’s largely located in affluent urban areas where you’d think it makes sense for Amazon to do their own procurement and warehousing rather than paying a premium for Whole Foods.
I don’t understand the rationale for this purchase and my feeling is that it will ultimately be judged by history as a bad idea.
So what you’re saying is that you’re frustrated by the limited opportunities to pay $4 for a strawberry?
POUNDSTONE: Can you give me a hint, Peter?
SAGAL: Yeah, the store - the new chain of stores from Whole Foods has not been given a name, but we’re sure the nickname will be something like Half Paycheck.
POUNDSTONE: Oh, they’re going to put reasonably priced foods?
SAGAL: Yes, reasonable prices…
(SOUNDBITE OF BELL)
POUNDSTONE: Oh, my gosh.
SAGAL: …For the first time.
POUNDSTONE: You know what? That’ll - 'cause, you know what? That - OK, my neighbors and I, last summer, went in on a strawberry from Whole Foods.
(LAUGHTER)
LUKE BURBANK: I mean, with interest rates where they are, you can’t afford not to.
SAGAL: Yeah.
POUNDSTONE: Yeah, exactly. So in a way, this is going to tear my neighborhood apart.
(LAUGHTER)
SAGAL: Whole Foods’ corporate stock has been slipping of late. It’s partially because people have noticed it’s weird to have to take out a loan to buy a package of brownies. Apparently people want a store with more reasonable prices. And apparently their customers don’t realize that store already exists and is called any other store in the world.
Hilarious. And true, from what I know. Having only been into a Whole Foods only a couple of times in my life, I likely have a romanticized notion of what they offer and the prices at which they offer it. With that said, there were a couple of cool products to which I wouldn’t mind having regular access. Now that I really think about it, what I really would love to see arrive in Quebec is Trader Joes!
I wonder what this means for rank and file eomoyees. Do they keep their existing benefits or is everyone downgraded and outsourced to an awful temp agency in which everything is managed like an Amazon warehouse house of horrors.
That would be nice. I started using Amazon Fresh after I injured my shoulder and decided that hauling groceries up three flights of stairs with a bum shoulder was a bad idea.
Amazon Fresh’s selection sucks. I would have thought one benefit of having a central warehouse would be having a great selection of items available, but their selection is actually much worse than the local grocery store. They also randomly run out of stuff, so I’ll get a notice that they’re out of a juice I like and it won’t be available for 3 days. The other day I was shocked when they ran out of my milk, I switched the order to organic which was still available.
The only thing I could think of is that they’re keeping their selection low and limiting their offerings to just companies that are willing to give them good deals, and they’re keeping a very low inventory of items that spoil to prevent lossage.
Another odd thing is, there are items I can get from Amazon Pantry that I can’t get from Amazon Fresh. It’s very odd. For example Amazon Fresh has Oceanspray Cranberry Rasberry and Pomegranate but it doesn’t have Cranberry Cherry, but Amazon Pantry has it.
My wife told me that she watched a documentary regarding whole foods and many of their own brand label products “365” are manufactured in China. You still pay the premium price though.
[quote=“JMR, post:13, topic:130237, full:true”]
I wonder what this means for rank and file eomoyees.[/quote]
Usually, nothing good. I mean, there is a chance Whole Foods employees continue doing what they do with very little change, but the more likely outcome based on how most acquisitions go is some will be made “redundant” via tech or Amazon’s own personnel, the management structure will change, some locations will close, and the company’s core mission will be turned in service to the buying company’s strategy.
