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Amazon Just Made Shopping at Whole Foods Cheaper (businessinsider.com)

Posted by msmash on from the amazonization dept.

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.

36 of 248 comments (clear)

  1. Lower prices, at first. by Immerman · · Score: 2, Insightful

    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.
    1. Re:Lower prices, at first. by Anonymous Coward · · Score: 2, Interesting

      You are way off base here. That is capitalism and free market competition. It's the way it's *supposed* to work. It sounds like we have a passive-agressive socialist here...

    2. Re:Lower prices, at first. by hughbar · · Score: 3, Interesting

      Not really, Amazon is really big and very 'horizontal', so there may be abuse of dominant position issues (see second bullet point) starting to appear. Of course, I'm a European so very nearly a socialist by definition, even if right-wing.

      Also, I'm expecting (fearing) that all the data and computing fire-power will be used for surge pricing, sooner or later. The stockholders would love it.

      They hardly pay taxes where I live, but they do use all our infrastructure, our legal system, benefit from policing etc. etc. so, like Starbucks and the others, they're not my favourite company.

      --
      On y va, qui mal y pense!
    3. Re:Lower prices, at first. by Oswald+McWeany · · Score: 4, Insightful

      Total tax rate for average person in the US is lower than most European countries... but not by much.

      VAT obviously higher than Sales Tax over here but made up in other ways.

      But what do Europeans get for slightly more taxes?

      Public Healthcare (lower infant mortality, fewer chronic diseases and high expected lifespan).
      Clean-efficient public transport.
      More parks and public spaces in urban areas.
      All schools properly funded, not just ones in areas with wealthy residents.
      Lots... lots... more...

      I'd trade slightly higher taxes if it meant the perks that you get in Europe... ... of course, higher taxes in the US means more money to spend on the military, not on anything useful.

      --
      "That's the way to do it" - Punch
    4. Re:Lower prices, at first. by Anonymous Coward · · Score: 2, Insightful

      That just shows your lack of understanding as to how the US works.

      Taxes in New York are considerably higher than taxes in say, Texas.

      When it comes to taxes, the US is more like a group of countries than it is a single country. So while the total tax rate in someplace like California will be much higher other locations like Oklahoma will have a total tax rate much lower.

    5. Re:Lower prices, at first. by Albanach · · Score: 2

      That just shows your lack of understanding as to how the US works.

      Taxes in New York are considerably higher than taxes in say, Texas.

      When it comes to taxes, the US is more like a group of countries than it is a single country. So while the total tax rate in someplace like California will be much higher other locations like Oklahoma will have a total tax rate much lower..

      That just shows your lack of understanding as to how Europe works.

      Taxes in Belgium are considerably higher than taxes in say, Latvia.

      When it comes to taxes, Europe actually is a group of countries. So, while the total tax rate in someplace like Denmark or France will be higher, other locations like Ireland or Poland will have a tax rate much lower.

    6. Re:Lower prices, at first. by larryjoe · · Score: 2

      Total tax rate for average person in the US is lower than most European countries... but not by much.

      A recent report from the Federal Reserve Bank of Chicago that compares tax rates in the US and Germany shows that the difference is quite a bit more than "not by much". By almost any measure of tax burden (other than corporate taxes), Americans have a significantly lower tax burden.

      As always, there is no free lunch (unless someone else is paying for it).

    7. Re:Lower prices, at first. by Immerman · · Score: 4, Insightful

      Yes, it is. Specifically monopolies are one of the oldest and best-understood failings of the free market. As soon as you drive the competition out of business, there's no longer a free market, and you reap the rewards of being the only provider. Meanwhile 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.

      Capitalism and the free market are social technologies, not holy edicts. Only a fool ignores their very real failings while clinging to an idealized fantasy.

      --
      --- Most topics have many sides worth arguing, allow me to take one opposite you.
    8. Re:Lower prices, at first. by thebullshitpatrol · · Score: 2

      It's all finagled so that someone is always making out.

      In Texas, property tax is high and income tax is nil. This is all part of the default upper class scheme to charge as much regressive tax (usually property and sales tax) as possible so they can pay as little income tax as possible.

    9. Re:Lower prices, at first. by mattack2 · · Score: 2

      Also, I'm expecting (fearing) that all the data and computing fire-power will be used for surge pricing, sooner or later. The stockholders would love it.

      Not exactly surge pricing, sort of the opposite.. but e.g. Safeway apparently does data-mining of what I buy, and very very often gives me deals _on stuff I buy anyway_ that's cheaper than the regular sale prices. (Other stores also do 'deals for you', but I haven't personally used any that as frequently gave me deals on things I bought.)

      I'm all for that, and if Amazon wants to do it too, great! (BTW, I don't shop at Whole Paycheck. Organic/anti-GMO are scams, and the food costs too much. If Amazon makes stuff I want to buy cheaper than at other places, great!)

      BTW, the people complaining about "but they'll eventually raise prices". Yeah, Amazon the website isn't always the cheapest, but is usually very close to it, PLUS they have had good service with the rare problems I have had. Isn't that exactly what you're asking for, paying extra for something that's useful (service)? So what do you want, low prices, or people paying for "extras"? Seems like a bit of hypocrisy going on with the critics. (Oh, I also get 5% back for Amazon purchases with the credit card that I pay no interest on.)

    10. Re:Lower prices, at first. by thebullshitpatrol · · Score: 2

      in actuality, it puts the burden on the lower middle class, as these types of things often do.

      Sales and property tax are as impactful as whatever percentage of your income you spend on groceries and your house. Who do you think is more likely to spend 90% of their income on groceries and their home, the lower middle class, or the upper class?

    11. Re:Lower prices, at first. by thebullshitpatrol · · Score: 2

      The general interpretation of things like sales tax and property tax is that the lower middle class is much more likely to spend most of their money on groceries and their home than the upper class. I.e., there's a minimum amount of money you have to spend on these things, and the lower middle class spends a larger portion of their income on them. Someone who is wealthy and is still paycheck to paycheck is doing something terribly wrong.

      Moreover, I would imagine that the upper middle class benefits far more from taking home more of their paycheck than they would not being charged property tax.

  2. That's impressive by Trailer+Trash · · Score: 5, Interesting

    They're now within one order of magnitude of the prices at Publix.

    --
    Do you have ESP?
    1. Re:That's impressive by Oswald+McWeany · · Score: 3, Informative

      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.

      Sams meat tends to be artificially lower than what you're really getting. I found that meat from Sams tends to shrink dramatically when you cook it because it is pumped full of water. Some of that $3.30 per pound your paying goes to nothing but water.

      --
      "That's the way to do it" - Punch
    2. Re:That's impressive by Tulsa_Time · · Score: 2

      Careful... ABC just paid $100,000,000 for talking about "pink slime" on the air.

      --
      5 out of 6 people enjoy Russian Roulette & 6 out of 7 Dwarfs are not Happy
    3. Re:That's impressive by Trailer+Trash · · Score: 2

      Ah, that feeling when you went for "Funny" and ended up with "Insightful" and "Interesting".

      --
      Do you have ESP?
    4. Re:That's impressive by edtice1559 · · Score: 2

      The issue here is that the reporting was sensationalist rather than a factual inquiry. And the product has been deemed safe by the FDA. I would eat finely-textured ground beef, but I'd expect it to retail for like $0.29/lb. Challenging the FDA decision in reporting would be quite reasonable. Implying that the food is unsafe without offering any evidence really wasn't appropriate. With a high-profile story like this, you need to be less sloppy in your reporting. http://www.reuters.com/article...

    5. Re:That's impressive by Reziac · · Score: 2

      Considering I can stand there and watch them cut and package it, you'd think this extra step would be more obvious...

      --
      ~REZ~ #43301. Who'd fake being me anyway?
  3. Destructive fascist capitalism by Suiggy · · Score: 2, Funny

    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.

    1. Re:Destructive fascist capitalism by Gravis+Zero · · Score: 5, Insightful

      If food is this cheap, people won't see the value in socialism...

      Oh? Well in that case, I suppose the government should stop subsidizing farmers. What's that? You dont know shit about agriculture? Oh my.

      --
      Anons need not reply. Questions end with a question mark.
    2. Re:Destructive fascist capitalism by alvinrod · · Score: 3, Insightful

      They really should stop subsidizing farmers though. The U.S. spends billions of dollars on farm subsidies that keep prices artificially high while at the same time spending billions of dollars on food stamps because some people can't afford food. It's utter madness to be doing both at the same time. The original justifications for having farm subsidies are no longer relevant and most of the subsidies aren't going to small family farms, but to corporations or those who don't need them.

  4. Re:becomes K-Mart by NoNonAlphaCharsHere · · Score: 2

    Nah, it'll still be "Whole Paycheck". $7.00 for 4 avacados? Oh, organic avacados.

  5. Tech news? by Anonymous Coward · · Score: 4, Insightful

    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?

    1. Re:Tech news? by Stephan+Schulz · · Score: 2

      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?

      They did mention the technique of sampling the particular products Amazon/Whole Foods announced as becoming cheaper. That's some mighty impressive new biased sampling technology.

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      Stephan

    2. Re:Tech news? by alvinrod · · Score: 2
      Every person also sees reduced prices. Look at the tech sector where the race to the bottom has made computers affordable for almost everyone in western countries and now with smart phones in places like Africa that traditionally did not have many computers for the average person.

      Reduction in prices means that people will increase consumption, and I suspect that there are a lot of people in a country who could benefit from eating better. This is a country with over a third of the population being obese, and a 6% (and increasing) rate of severe or morbid obesity. Finding ways to reduce the cost of non-processed food and to bring it to more people is a good thing.

      A five percent yearly increase in prices is supposed to be good for the economy.

      Find me an economist that believes that. Five percent yearly inflation (its not goods getting more expensive, but money losing its value. Further if you assume a race to the bottom, costs should be dropping everywhere, not just as Whole Foods, but also with their suppliers.) means that your currency will lose half its value in only 14 years. Even people who are in support of an inflationary monetary policy would want 5%.

  6. Re:What kind of strategy is this? by Anonymous Coward · · Score: 4, Informative

    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.

  7. Re:What kind of strategy is this? by Binestar · · Score: 2, Informative

    Your understanding of Amazon is poor. https://www.recode.net/2017/4/...

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    Do you Gentoo!?
  8. Re:Environment, people and animals by nospam007 · · Score: 5, Funny

    "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"

    OK, I'll buy locally produced bananas in Montana, good advice, Sir.

  9. Re:What kind of strategy is this? by EvilSS · · Score: 2

    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.
  10. Re:Environment, people and animals by ledow · · Score: 3, Insightful

    Or, buy the cheapest you can find, because price is intrinsically linked to the number and extent of median processes and it costs less to fly bananas to countries than it does to try to heat greenhouses to grow them in that country.

    And then give the difference to Greenpeace or whatever. Or use it to plant your own garden.

    Just because you want to save the planet, doesn't mean you need to be a hippie living in a tree.

  11. Re:Environment, people and animals by Oswald+McWeany · · Score: 5, Funny

    "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"

    OK, I'll buy locally produced bananas in Montana, good advice, Sir.

    Sorry. No banana for you! Local Produce only.

    You live in Montana, you're only allowed to eat potatoes and cabbages and things that grow locally. At least you get to eat beef. People in New York City have to eat pigeons.

    --
    "That's the way to do it" - Punch
  12. Re:What kind of strategy is this? by rwa2 · · Score: 2

    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.

  13. Re:becomes K-Mart by JohnFen · · Score: 3, Informative

    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.

  14. Re:Environment, people and animals by apoc.famine · · Score: 5, Funny

    People in New York City have to eat pigeons.

    I believe they're called organic free-range squab there. Only high-end restaurants carry them.

    --
    Velociraptor = Distiraptor / Timeraptor
  15. Re:Amazon won't be a monopoly by Anonymous Coward · · Score: 2, Insightful

    This is an image by someone that doesn't understand the stock market. Market capitalization is something completely different from market share. Market cap is just how much it would take to buy all the shares of a company at the current market price. If some idiot bought Joe's general store in the middle of nowhere for 1 trillion dollars, you would have the same picture except that Joe's would now take up half the picture. A quick peek at the most recent income statement of Wal Mart and Amazon shows Amazon had approx. 135 billion in gross revenue in 2016 while Wal Mart grossed approx. 436 billion. So Amazon the company is selling on the public stock market for twice the price of Wal Mart with a third of the gross revenue. As far as net income goes, lets not even go there. So as far as market share goes, Wal Mart seems to have about triple the retail market share that Amazon does.

    TLDR - the picture is easy to misinterpret for those that don't understand the stock market.

  16. Mod parent up to +10. Okay, 5. by Futurepower(R) · · Score: 2

    Mod parent up.

    Amazon gross revenue, 2016: $135.99 billion.

    Walmart gross revenue, 2016: $485.87 billion.