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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.
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
Nah, it'll still be "Whole Paycheck". $7.00 for 4 avacados? Oh, organic avacados.
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.
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?
It says non-organic are already only $1. That's less than I'm used to paying at Kroger here in the midwest (although $2 for organic avocados is pretty standard). Avocados was a poor choice for an example, because the price varies quite a bit by location in the US.
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.
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!
Given how utterly fucked up your entire premise is, I bet there are a LOT of things you "do not get", mostly related to reality.
Your understanding of Amazon is poor. https://www.recode.net/2017/4/...
Do you Gentoo!?
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.
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!
They were not profitable for a long time due to re-investing their profits into growing their business. It's not like they are Sears with rapidly declining sales vs fixed costs.
I browse on +1 so AC's need not respond, I won't see it.
Thirty-five dollars worth of bananas is barely an appetizer for minions.
#DeleteFacebook
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?
Strawman. What we want now is fully automated luxury communism. Everyone gets a nice home, an iPhone, and as much access as they need to high end supply chains like whole foods. Forget the old, failed, faux communisms. Embrace the nu-communism, comrade.
and that's a lot of bananas!
Are bananas an add-on item now?
"That's the way to do it" - Punch
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.
But what are they going to do about stupid people who think organic food is better and gluten is going to kill them?
Could someone explain avocados to me? Do they have some sort of magical nutritional value? I don't dislike them... though eating them sometimes makes me nauseated. But there's a lot of other stuff I enjoy that other people seem to consider "gross". I always assumed people ate avocados because they were big and cheap and plentiful, and you can't dip everything in just salsa and sour cream ALL the time. Still, never thought guacamole was good enough to warrant charging extra for.
...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.
Nah, it'll still be "Whole Paycheck". $7.00 for 4 avacados? Oh, organic avacados.
Has WF changed lately? The times I've been in one it was all the packaged food with "organic" on the boxes and cans. In the actual produce section there was a small "conventionally grown" sign under all but a very small selection.
Could someone explain avocados to me?
Avocados are the iPhones of the grocery world. For those who cannon afford avocados, watermelons are the Android equivalent.
Um, the AC is right... see the film industry... no movie ever makes a profit if they can help it. Don't ever accept payment in terms of % of profits, there aren't any after Hollywood accounting is done dishing out various production fees and expenses to various shell companies linked to the producers.
US companies are about building and growing brand recognition and mindshare... intangible intellectual property that you can just sit at the top and rake in the dough for other people's work.
Amazon itself is famously frugal... developers get very few perks compared to other tech employers in the area... no free lunch, no free devices for dogfooding their own products, no free soda cabinets to keep productivity up, not even prime membership. They consider this part of their corporate "leadership" culture, though... certainly not a way to boost profits at the cost of their employees' productivity and morale.
Bananas seem to be a special case, though... they have a free banana stand on campus where anyone in the public can drop by and get a bite.
You're supposed to let them ripen, and eat them right away. They don't hold up well once they're sliced into a salad, for example. I ate a salad with avocado that I had prepared a day before, and the texture of the avocado was gross, like eating a green slug.
Now I make my salad ahead of time, but I put in a half avocado covered in cling wrap, then I slice it when I eat the salad.
Mostly random stuff.
I eat them because they're delicious.
However, it's pretty hard to find good ones. Avocados are everywhere. Avocados that are worth eating are harder to find when they're in season, and impossible to find out of season.
World's fattiest vegetable, by a long shot. If you can't figure out why that's popular you're not eating them right.
Amazon is as profitable as they want to be. Anyone who's paid even the slightest attention knows that their growth has been funded pretty much from the beginning by pumping any excess money (AKA potential profit) back into the company. They could have pulled off enormous profits quite some time ago, if they wanted to.
Log in or piss off.
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.
Put a ripe avocado on a slice of rye bread, sprinkle some salt and pepper on it. The result is far superior to a buttered bread, at least for me.
"It's such a fine line between stupid and clever" -- David St. Hubbins, Spinal Tap
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.
[...] the last time he ate a fruit was about 40 years ago.
Not true. I had ketchup on my cheeseburger last night.
Since then, it's power bars and other sugar-and-fat laden processed bullshit that he's deluded himself into thinking are "health" foods.
Never mind that I lost ten pounds and wearing smaller sized pants.
The biggest selling points:
Heart healthy fats
Helps reduces cholesterol
Helps in weight loss
Protein Powder, milk, and half an avocado gives you a healthy milk shake. (And, no, you don't taste the avocado.)
Care killed the cat, but satisfaction brought it back.
Also, as I mentioned in my own reply, bodybuilders and fitness minded folk latched on to the idea of mixing one in their protein powder drinks. It's a natural thickener and gives it the consistency of a malt.
Care killed the cat, but satisfaction brought it back.
Some things apparently need to be fresh and regional.
And avocados are strenuously one of those things. They also have a lot of variation between types. As with a lot of produce (tomatoes, bananas, etc.), the ones that appear in the store -- particularly in the off-season or in stores that are far from where they are grown -- are selected because they store and ship well, but they're usually pretty awful to eat.
This seems to be particularly true of avocados. Tomatoes used to be the clearest example of the problem, but I think avocados show the problem even more clearly.
In my social circle we call out-of-season or distantly-grown avocados "unprocessed guacamole", since guacamole is more or less the only thing you can do with them.
(And, no, you don't taste the avocado.)
But then all you're going to taste is that nasty protein powder. That's hardly a selling point!
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.
What I was replying to was the straw man. What I posted was the truth, and righteous destiny, of mankind.
They're really good, but unfortunately they don't travel well. You can get a dozen wonderful avocados in the valleys of California for what you'd pay for a single mediocre one in most of the US.
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.
Holy shit! How do you still have a subscriber asterisk?!
Being a huge proponent of paying for sites instead of enduring the scourge of advertising, I've always subscribed here, but it broke during one of the last ownership changes and still doesn't seem to work...
If you want a vision of the future, imagine a youtube comments section scrolling - forever.
Oh, er, mad hax, dude.
Like, I paid the $5 once back in my college days two decades ago, and then I checked the option for "show me ads anyway". So I guess it never wore off?
and thanks for telling me what the friggin asterisk was for... I always assumed it meant something else :P
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.