Amazon Just Made Shopping at Whole Foods Cheaper (businessinsider.com)
Whole Foods just got less expensive. From a report: On Monday, the day that Amazon's $13.7 billion acquisition of the grocer went through, prices on certain Whole Foods items immediately dropped. On Friday, Business Insider visited a Whole Foods location in the Gowanus neighborhood of Brooklyn, New York, and checked the prices on 15 items (including a few variations on similar items) mentioned by the companies. The total cost of the basket on Friday -- pre-acquisition -- was $97.76. On Monday, we returned to the Gowanus Whole Foods and checked back in on the same items. This time, the total cost of the 15 items was $75.85. That's a nearly 23% drop in the total cost. Whole Trade Banana: 30 cents (Price dropped to $0.49 a pound from $0.79). Lean Ground Beef: $2 (Price dropped to $4.99 a pound from $6.99). Local Grass-Fed 85% Lean Ground Beef: $4 (Price dropped to $6.99 a pound from $10.99). Four-pack of Organic Avocado: $0 (Price stayed at $6.99 for a pack of four). Hass Avocados: $1.01 (Price dropped to $1.49 each from $2.50) for instance.
That's the siren song of growing monopolies - economies of scale let them lower prices significantly below the competition... at least until the competition crumbles.
--- Most topics have many sides worth arguing, allow me to take one opposite you.
Most likely the future of whole foods
I understand that Amazon hasn't been profitable for a while. Why would a company with such an ugly statistic slash prices this much? I do not get it!
Are these just loss leaders (like every grocery store offers), or is this a real, long-term effort to lower prices at Whole Foods? Will Amazon be taking a loss on Whole Foods or are these prices actually (using one of Whole Foods' favorite words here) sustainable?
They're now within one order of magnitude of the prices at Publix.
Do you have ESP?
These low prices are destructive and will have consequences. If food is this cheap, people won't see the value in socialism and won't unite against capitalist organizations like Amazon.
I'll get my raft and float over to our local Houston Whole Foods this morning to stock up.
"A person is smart. People are dumb, panicky dangerous animals and you know it." - K
Where was all that money going?
There is Whole Food just a few blocks away from me that's closed. In fact all stores are closed. Wish it was open to buy some more food. I'll give it few days before people become desperate enough to break in to that Whole Foods.
In a few years after the marxist antifa democrat party gets into power they will implement price controls thus sealing our fate to be like Venezuela. Scarcity, poverty, malnutrition, starvation is how the collectivists control you. When you're weak you can't fight back.
(insider trading, get it - Business "Insider")
Sometimes Whole Foods had products not comparable to other grocers in which case prices are hard to directly compare. Sometimes though they carried exactly the same product as other grocers, from the same company in the same packaging etc, and in those cases Whole Foods was typically a lot more expensive than the normal chains.
There is a lot of room for W.F. to reduce prices without impacting quality.
I missed the part in the article where it mentioned the new technologies they are utilizing to achieve this price reduction.
Do we really need grocery store slashvertisements?
Any articles that say why prices dropped so much? Was Wholefoods over pricing (probably), or is Amazon selling at a loss to kill competition (also probably)?
Whole Trade Banana: 30 cents, Lean Ground Beef: $2 - that can't be good for neither the environment nor the people nor the animals.
Much better: buy locally produced stuffed, pay fair prices, eat less meat.
and that's a lot of bananas!
23% markdown on Whole Foods, they are still more expensive than the competition. They have something like 1% market share for groceries. Even the largest seller of groceries (Wal-Mart) only has 16% market share. We are pretty friggin' far from a monopoly in that sector.
But Whole Foods are prominently located in wealthy high rent areas. And their locations are much more better designed. They actually pay for architects to design their locations instead of building a standard box building.
No really! The whole world should stop whatever they're doing and rejoice! Syrian rebels? Put down your guns! All you starving Africans? Jump for joy! India? Let the feast begin!
being a hipster place to be seen. yes...the prices kept the hoi-polloi out.
... how in the world is this something that should be a /. article?
That's the real question.
That's the siren song of growing monopolies - economies of scale let them lower prices significantly below the competition... at least until the competition crumbles.
Amazon is not and probably never will be a monopoly anymore than Walmart is currently. They might be able to set prices in some markets that others follow but they'll (probably) never have so much pricing power that they can drive all competition out of the market. Even Walmart has never been able to drive Target and many others out of business. Not everyone competes on price. Nobody shops at Nordstroms because they are bargain hunting. I'm sure Amazon will drive some marginal competitors out but I don't see any scenario where they drive the strongest competitors out.
And who can resist the Gowanus Canal secret sauce?
But what are they going to do about stupid people who think organic food is better and gluten is going to kill them?
Well, now that the barrier to entry (high prices) has been removed from Whole Foods, the unwashed masses are sure to pour in. People will fondly remember the old days when nobodies couldn't afford the prices, but the good people could. Kept the place clean, no deplorables, "not a cultural fit" as Google would say. Well, that's all over now. Get ready for Whole Foods food stamp purchases to go way up, and starting to see Wal-Mart shoppers there as well. A sad day, for some of us.
Shutting down free speech with violence isn't fighting fascism. It IS fascism!
...the first taste isn't free.
Care killed the cat, but satisfaction brought it back.
I'm sorry, but like $7 for a pound of fucking beef? That's ridiculously expensive.
Reduced to $5 for a pound? STILL too fucking expensive.
I'd say $3 is maybe a fair price. Not a great price, but a "fair" price.
It used to be that anything incorporating hamburger meant an affordable family meal could be made out of it. It was a thing you used to eat on the super cheap.
Now it's verging on the expensive and a "special treat".
Jesus fucking christ.
But of course, soda and mac and cheese can still be had for absurdly priced. Anythign that is total shit for you is nearly free.
Yes, I know the people don't want their store to change, but did you ever consider that perhaps, just maybe, Whole Paycheck is price gouging? You aren't alleviating your while guilt by overpaying and sending money into the corporate coffers. You are an idiot if you think Whole Paycheck isn't a business that intends to make a profit. Do you think they pay (much) more than minimum wage because you are paying more?
I understand that Amazon hasn't been profitable for a while. Why would a company with such an ugly statistic slash prices this much? I do not get it!
Because Amazon doesn't chase quarterly profits they can actually do things that benefit the company in the long run. They manage expectations of shareholders and have since they went public. Amazon "isn't profitable" because they reinvest in the company to grow rather than trying to maximize quarterly profits for shareholders who don't give a crap about 10 years from now. They can slash prices because they don't have to feed the earnings monster and can do things to grow Whole Foods in the long term. In reality Amazon could be highly profitable tomorrow if they wanted to be but that probably wouldn't be smart.
I was just thinking I bought a 6lb pack of 90/10 ground beef at Sams for less than $3.30 a pound, so I fail to see the value in these incredible savings.
I do. Not all ground beef is the same. Criticize Whole Foods prices if you like but it's hard to argue that the quality of their meat (and most other) products isn't also better than Sam's in most cases. Whether it is worth the price difference is a different question but you aren't comparing identical products. It is unlikely your package of Sam's ground beef was organic nor is it likely to be of the highest quality. I've bought plenty of meat from Sam's in years gone by and it's fine but it's not as good a product as I can get at Whole Foods either. Whether that matters to you or not is of course a decision unique to you.
Since it's impractical to insist on 100% locally-grown foods, 100% of the time, at 100% of possible locations, this means that any food which IS locally-grown is no better than shipping the same thing half-way around the world.
Impeccable!
Much better: buy locally produced stuffed, pay fair prices, eat less meat.
Locally produced is not always better nor is it always more environmentally friendly. Sometimes it is and sometimes it isn't. It's also not always cheaper or better for the economy in general. Buying local isn't a bad thing but it isn't the cure all many pretend it is either. Not to mention the fact that a lot of locations don't produce a wide variety of foods locally. Good luck buying locally grown mangoes in Idaho.
Fair prices? That's such an open ended concept that it's hard to know where to start. What do you mean by "fair"? Fair to who? It's easy to say pay more if you are wealthy but a lot of people have a pretty hard time making ends meet. How is it fair to expect a single parent making a low wage to pay high prices in the interest of supporting people she's never met?
Eat less meat? Agreed. Most people should.
Amazon can't put them all out of business, but they can certainly make them all feel some pain.
You say that like it's a bad thing. Amazon is forcing other companies to improve just like Walmart did and others before them. As long as it is to the benefit of people like you and me then bring on the pain.
Granted Wal-Mart and Target don't truly target the same people, and Amazon will be it's own niche, but it can certainly reduce those companies' profitability considerably.
There is a heck of a lot of overlap and any reduction in their profitability is only to the benefit of you and me most likely. Amazon is going to go head to head with Walmart in a big way. The largest threat to Amazon is probably Walmart getting their Internet sales up to Amazon's level. Combined with the store footprint Walmart has that is a potentially existential threat. That's why Amazon is putting warehouses everywhere and starting to get in bricks and mortar retail. Walmart stores are effectively warehouses and Walmart is VERY good at logistics. Amazon is trying to get local before Walmart figures out ecommerce.
"The race to the bottom."
No. Whole Foods was extremely overpriced before, in my opinion. There are many shoppers who don't care about spending money, but they want their food to be "Whole". Wouldn't want to eat Half Food!
For example, there are women who don't like their husbands, but their husbands make a lot of money. Since the two don't talk much, they don't talk about money.
Fuck you greenie, I only eat keto.
Prices always get lower, our money buys more, and eventually everything is free.
You be paying less cash for items, but now even more of your data is being mined. People are just selling all of their shopping habits, their whereabouts, their schedules, etc for a few pennies.
I don't respond to AC's.
Oh, thanks... that sounds about right. I don't enjoy animal fats as much as most other people seem to either, so this makes sense to me. Maybe I just need to find a dish where they're marbled in moderation with the rest of the schlopp... which explains why I likes me some guacamole in burritos but not really alone or as a dip or even as a salad topping.
Mod parent up.
Amazon gross revenue, 2016: $135.99 billion.
Walmart gross revenue, 2016: $485.87 billion.
Higher prices create an incentive for more Uber drivers to go out and drive -- quickly alleviating an imbalance between supply and demand.
Wouldn't you want lots of Uber drivers to be incentivized to help evacuate a city?
"Gouging" is a populist, and unfortunate, name for the practice.
That that is is that that that that is not is not.
no new competition arises, because everyone knows that the minute they enter the market the monopolist can drop prices long enough to drive you out of business, so trying to compete is just an exercise in throwing away your startup investment, which could have been better spent entering a market not dominated by a monopolist.
Obviously that's not always the case. United Launch Alliance had a monopoly on launching U.S. government payloads. Then along came SpaceX, whose low prices ULA is unable to match.
You have to love the attitude of COO Gwynne Shotwell:
Ms. Shotwell was asked why the company claimed to be able to offer its services for 25 per cent of the ULA price. "It's hard for me to say," Ms Shotwell replied. "I don't know how to build a $400 million rocket. The more difficult question would be to say that I don't understand how ULA are as expensive as they are."
That that is is that that that that is not is not.
The "whole paycheck" canard is empty headed. It makes sense to compare prices at different stores for the exact same product. But it does not make sense to label an entire store as being "extremely overpriced" when it sells a lot of expensive products that no other store sells at any price. By that standard, Neiman Marcus is "overpriced" compared with Walmart, when they do not compete.
Doug Jensen
For the same product, Whole Foods often charged more, it has seemed to me. Quote from the linked story:
"Some of the new discounts nearly cut prices in half. Bananas, for example, used to be sold for $0.79 a pound. Now they cost $0.49 a pound. The price of local grass-fed 85% lean ground beef went to $6.99 a pound from $10.99."
At Walmart, $4.47 per pound.
Whole Foods charged higher prices for the same product.
However, to me, the real issue is very healthy food at minimum expense. There are many ways to eat wheat. Eating a wheat product that has been processed to seem to justify high expense is not likely to be healthier than a product that required less processing.
I agree that sometimes I find what seems to be the identical product priced higher at WF than at my regional grocery store. But I also find the identical product priced higher at the regional store than at WF (my favorite brand of lemonade for example). My objection is that random items priced higher than another grocery store does not rationally qualify WF to be "whole paycheck" since everything I buy simply is not available anywhere else (I don't buy bananas anywhere, I have to take prescription Klor-Con pills and I'm not fond of bananas). Nothing I buy at Neiman Marcus is sold at any other store I have found, so I don't think it should be called "whole paycheck."
Doug Jensen
Local grass-fed 85% lean ground beef is not the same product as pre-packaged "ALL NATURAL*" 85% lean ground beef.