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Amazon To Buy Whole Foods Market For $13.7 Billion (usatoday.com)
Amazon said Friday it would buy Whole Foods Market for $13.7 billion as the giant internet retailer makes a deeper push into the grocery space. From a report: Amazon has dabbled in brick-and-mortar operations, experimenting with a bookstore that opened in New York last month and plans to open "no-checkout" convenience stores. But the Whole Foods acquisition represents a dramatic departure from its early business model founded on online retailing and related technology. Grocery retail is a notoriously thin-profit-margin business. And Whole Foods -- often derided as "Whole Paycheck" -- has struggled in recent years to keep up with emerging competitors that are expanding nationwide with cheaper items. Traditional grocery stores have also widened their organic food selections in hopes of retaining customers who are increasingly looking to eat healthily.
I kind of figured Amazon would try to get into the grocery business in a big way but this is not the strategyI would have expected. It's an interesting approach from a business perspective. Whole Foods is struggling with cost and pricing but has a good brand and Amazon is amazing at the back end stuff. Might work brilliantly if they do it right. Might be a catastrophe. It's certainly well outside Amazon's wheelhouse to get into traditional retail in such a big way but it does give them immediate access to a high quality group of supplier relationships in groceries.
It'll be interesting to see what comes of this. At one point grocery stores used to be somewhat all-purpose in suburban areas, sometimes they'd have a decent sit-down restaurant, a section with more housewares, sometimes clothing or a limited amount of furniture, etc. We even had a chain around here that folded-into Smiths, then Fred Meyer, and ultimately Kroger that had a garden section similar to what you'd find at a Home Depot or Lowes. At some point most of the stores did-away with these extra features except for a few that retained "Marketplace" tacked-on after the name of the store, but even those usually limited themselves to a little bit of interior decor and some housewares like you'd find at a Bed Bath and Beyond. Everyone basically pushed to the bottom, basically going to mostly food.
Now that trend seems to be reversing. Local grocery stores are even opening wine bars inside, plus restaurants and the like. The amount of non-food stuff hasn't grown yet but I'm curious if it will, if grocers expect people to get tired of making multiple stops. With Target and Walmart having increased the size of their grocery departments this sort of expansion within grocery stores might be a way of fighting-back against Target and Walmart.
It'll be curious if Amazon uses the grocery stores as a means to receive Amazon purchases quickly without having to have a Prime membership; if ship-to-store for next-day pickup on things that normally would require several days becomes a thing. That might be one of the ways to appeal to customers that might be able to afford Whole Foods pricing.
Do not look into laser with remaining eye.
Amazon's no checkout will be stopped by liquor laws unless they have an person on staff to check id's also city's / states may try to pass laws like the ones that say you can't pump your own gas just to keep people working.
One of the last big union strongholds was grocery, with Kroger and Safeway/Albertsons employees being unionized. They've been facing stiff competition from non-union Walmart, Trader Joe's, Costco, and Target and some new non-union entrants like Aldi.
Now with Amazon 's big push into the grocery business, unions are setup for even bigger losses.
I think there's a bit more to the Whole Foods business model. The high prices keep traffic low.
There's a local chain here called "Market Basket". It's a family run chain that was in the news a few years back when the employees went on strike to defend the ousted CEO. The customer service is excellent, the meat and produce good, and the prices are the lowest of any of the local chains. The problem is that it's always *packed* with shoppers. The aisles are congested, and sometimes I can't even find parking. Every day is Apocalypse preparation day there. At times I've had to wait twenty minutes for deli service, even though they've got five guys behind the counter working like sled dogs.
So if I need one or two things in a hurry I can't at the convenience store, I'll breeze into my local Whole Foods. I'll park withing fifty feet of the front door, walk right up to the meat counter and then right out to checkout, and there's seldom anyone in front of me. An expedition that would take over half an hour at Market Basket is done and dusted in five minutes at Whole Foods, and I pay for the privilege.
By any objective standard, Market Basket is a more sensible place to buy groceries; Consumer Reports ranks it second out of sixty American chains in their most recent evaluation; Whole Foods comes in #27, largely because of their obscene prices. But it's almost like they're in different businesses because they provide different customer experiences.
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It's not the GMO part of GMO that's the problem, it's the fact that it's been genetically modified to be resistant to herbicide, and the fact that crops are drenched in glyphosate herbicide just before harvest in a process called 'dessication', which leaves detectable amounts of glyphosate residue in those crops, which ends up in your body, fucking up your metabolic processes that's the problem.