Amazon is buying Whole Foods!!!

Just got this from my brother via email...

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ponyboy said:
Walmart created a one stop shop years ago. That wasnt innovation then? Is that what you're saying?

So much hate for walmart and so much love for amazon. I dont get it. But like everything else...when amazon becomes too big for its own good...people will start to hate on it...thats just human nature. Until then...drink away.

In all seriousness though...I ask this question every time I see a thread on amazon...and no one has ever given a real answer as to why theres so much love for bezos and hate for waltons...it makes zero sense.
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So easy to answer for me. Long ago Walmart lost the skill to evaluate cost vs price vs value. I compared national brand jeans from WM and the back pockets were smaller than than same brand and style purchased elsewhere. They got so good at demanding price cuts that some vendors took short cuts. Even Walmart knows they have a huge problem which they appear to be addressing with better wages benefits etc. I agree with your suggestion that companies have to adjust to remain successful once they become dominant. WM is pretty much a last resort for me but we are fortunate to have options.
 
I guess this answers the question if amazon will make b and m stores obsolete. No, cause they are trying to get in on that. [emoji38]

I have local chains (Kroger subsidiaries) already offering 'clicklist'. You buy your groceries online, then set up an appointment for specific time to go park in specially numbered stalls to have your groceries delivered to and loaded in your vehicle. Nothing new there. Don't use it cause I want to select my own produce, dairy and get the ice cream last so it's not already melting by the time I ring out.

As far as amazon taking long term losses to be the lowest price, well that is what WM would do till the competition was gone then the prices magically started to rise. I'm sure it will follow the same path with amazon as you can't stay in business by losing money. May the deepest pockets win [emoji849]
 
hopefully this doesn't drive away the whole foods die hard who believe in whole foods mission ..
 
jzajzz said:
hopefully this doesn't drive away the whole foods die hard who believe in whole foods mission ..
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And if the "Whole Foods mission" dies, there will always be other retailers who knew the mission before Whole Foods appeared in their neighborhood.

Trader Joe's (mostly west coast)
Puget Consumer's Coop today called PCC Natural Markets (western Washington)
Kroger stores (and subsidiaries) with ever-expanding natural and organic fresh and packaged foods

If you look around, you'll find more. In my case, I'd use Trader Joe's before Whole Foods, and on occasion Fred Meyer (Kroger). Why? Same quality and lower prices at Trader Joe's - fill in the blanks at Fred Meyer.

- Rita
 
Jeff Bezos: I'm Hungry. Alexa, buy me something from Whole Foods.
Alexa: OK. Just bought Whole Foods.
Jeff Bezos: WHAT!$!*&@^&
 
Fermion said:
I think car insurance is next. Watch out Buffett, Amazon is coming for your meat and potatoes.
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If you mean GEICO, Car insurance is a very minor part of BRK's insurance business, and they do a LOT of things other than insurance. kill the gecko, It's more like losing a maraschino cherry than meat and potatoes.

But is AMZN ever going to make any money? Don't they sell for almost 200x trailing 12 EPS? Adding slow growth -low margin businesses to a high multiple stock may work short term, but eventually you have low margin - low growth businesses with too high a valuation.

Bathe in the Bezos brilliance while it lasts.
 
Telly said:
I think it shows that even good companies can make bad decisions.

Whole Foods (AKA "Whole Paycheck") is on the skids. The premise they were based on, that people would pay more $$ for "pure" foods, has deflated. Other grocery chains are doing the same, without the large premium. There have been some newspaper stories on this recently.

The grocery business is low margin, has to be high volume, requires special handling, and product expires quickly (some in just hours!).

When a corporation buys a company that is on the skids, they (think) they have a great vision of what they will do to turn it around/merge it with their own, use, etc. In my observations and experiences, many/most of the acquisitions were ill-founded or ill-executed and were a big waste of $.

I think the "winner" today is Whole Foods shareholders, who can dump the stock today and get out!

Recency bias and aura can lead one to think that Amazon can do no wrong...
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+2
I generally agree with all of this although Bezos continues to surprise/disrupt, now I hear they want to compete with Walmart and supplement their fulfillment process. Competing with Walmart for groceries seems like a low bar in the area where I live. I don't recall anyone ever having much good to say about Walmart grocery except low prices. I was recently there out of convenience and wouldn't go back for general shopping.
 
IMO people are missing the point of this deal by getting all spun up about groceries.

Amazon is gaining over 400 stores and the services of over 90,000 employees, serving an upscale clientele. (Real Estate | Whole Foods Market) Every store has good truck docks and logistics space, plus good street visibility and a generally favorable reputation in its community. The fact that these stores currently sell food and mostly support themselves make the deal easier, as the Whole Foods line of business will not eat cash while it is being refitted to be more than, or possibly not even, a food store company.

$30M per store seems a bit rich, but how else could Amazon acquire this kind of asset almost instantly? What other asset even exists that is similar? Grocery store chains tend to be regional and physically larger. Coffee shops and fast food chains are mostly franchised and their real estate is unsuitable anyway. Car dealerships, same story. I can't think of a better single option if Amazon wanted an instant infrastructure platform suitable for an expanded and closer-to-consumers marketing scope.
 
OldShooter said:
IMO people are missing the point of this deal by getting all spun up about groceries.

Amazon is gaining over 400 stores and the services of over 90,000 employees, serving an upscale clientele. (Real Estate | Whole Foods Market) Every store has good truck docks and logistics space, plus good street visibility and a generally favorable reputation in its community. The fact that these stores currently sell food and mostly support themselves make the deal easier, as the Whole Foods line of business will not eat cash while it is being refitted to be more than, or possibly not even, a food store company.

$30M per store seems a bit rich, but how else could Amazon acquire this kind of asset almost instantly? What other asset even exists that is similar? Grocery store chains tend to be regional and physically larger. Coffee shops and fast food chains are mostly franchised and their real estate is unsuitable anyway. Car dealerships, same story. I can't think of a better single option if Amazon wanted an instant infrastructure platform suitable for an expanded and closer-to-consumers marketing scope.
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This ^

Amazon gains a distribution network and brick and mortar. I foresee a Amazon ship to store option in the future to cut out/lower their shipping costs.
 
I went to my local Walmart today and was dismayed by how few shoppers there were. Giant corporations like Amazon couldn't care less about destroying family-owned businesses like Walmart. What a shame.
 
https://en.wikipedia.org/wiki/Creative_destruction

"According to Schumpeter, the 'gale of creative destruction' describes the 'process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one ...' "
 
LRDave said:
I went to my local Walmart today and was dismayed by how few shoppers there were. Giant corporations like Amazon couldn't care less about destroying family-owned businesses like Walmart. What a shame.
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:ROFLMAO:
 
LRDave said:
Giant corporations like Amazon couldn't care less about destroying family-owned businesses like Walmart.
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I assume you are being sarcastic by lumping Walmart in with family-owned businesses?
 
Looks like Whole Foods Market shareholders approved the takeover yesterday. https://www.bloomberg.com/news/arti...-shareholders-to-get-their-say-on-amazon-deal
Whole Foods shareholders voted to bless a union with Amazon that the organic grocery chain's CEO called "love at first sight."

The approval from Whole Foods shareholders on Wednesday is one of the steps required to close the deal. It also needs the go-ahead from government regulators. Seattle-based Amazon.com Inc. has said it expects the deal to close before the end of the year.
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Love the use of the word "union". It makes it sound so wholesome - which is not typical for corporate acquisitions. :)
 
There's a Whole Foods next to me. But, since in the future Whole Foods will be part of the collective called Amazon, one what future stores will be like. Healthy foods or hubs for food delivery or something else.
 
easysurfer said:
There's a Whole Foods next to me. But, since in the future Whole Foods will be part of the collective called Amazon, one what future stores will be like. Healthy foods or hubs for food delivery or something else.
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Could be both. One core strength of WFM is the sourcing and certification of the goods it sells - a real issue in an industry where there is substantial product misrepresentation.

Amazon isn't waiting around. They closed the deal today and already announce their first initiative. https://www.bloomberg.com/news/arti...r-prices-as-acquisition-of-whole-foods-closes
The company said it will begin slashing prices on a broad cross section of Whole Foods groceries Monday -- the same day the $13.7 billion deal is set to close. That will start with items such as chicken, eggs, avocados and organic farmed salmon. Amazon reeled off a long list of other plans to combine its leading e-commerce and delivery assets with the physical locations of Whole Foods stores.
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The company said it will begin slashing prices on a broad cross section of Whole Foods groceries Monday -- the same day the $13.7 billion deal is set to close. That will start with items such as chicken, eggs, avocados and organic farmed salmon. Amazon reeled off a long list of other plans to combine its leading e-commerce and delivery assets with the physical locations of Whole Foods stores.
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This might be a negative for the brand new and highly acclaimed WF store near us as it has the reputation of being the store the "well to do" folks shop at as they can show off their BMW, MB. Bentley, etc while they pay up for the goods. If Amazon turns this into a discounter, I doubt if the existing clientele will still shop there.
 
I live pretty close to a Whole Foods store, too. But honestly, I have only been there once and that was over 13 years ago. The prices seemed awfully high. Also, many here were not too impressed with their performance after Katrina in 2005. They were just about the last grocery store in the area to complete the hard work required to return to normal operations.

It sounds like Amazon has decided to change the image of WF from "Whole Paycheck", to a more affordable store. If they can do this and keep the quality intact, that would be nice.

But what I really want is for Amazon to use this opportunity to set up Amazon Fresh delivery services here. That would be so cool.
 
W2R said:
I live pretty close to a Whole Foods store, too. But honestly, I have only been there once and that was over 13 years ago. The prices seemed awfully high. Also, many here were not too impressed with their performance after Katrina in 2005. They were just about the last grocery store in the area to complete the hard work required to return to normal operations.

It sounds like Amazon has decided to change the image of WF from "Whole Paycheck", to a more affordable store. If they can do this and keep the quality intact, that would be nice.

But what I really want is for Amazon to use this opportunity to set up Amazon Fresh delivery services here. That would be so cool.
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Looks like you will have some perks at WFM because you are a Prime member.

Amazon Prime Whole Foods discount - Business Insider
 
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