It is apparently freaking the shttps://moelane.com/2017/06/16/more-on-that-ama…hole-foods-thing/upermarket industry out. More accurately, it’s freaking out investors. Fox Business:
Kroger shares slumped 11 percent, United Natural Foods Inc tumbled 17 percent, Sprouts Farmers Market Inc sank 11 percent. The S&P 500 food and staples retailing index was off 5 percent… Wal-Mart dropped 6 percent and Target Corp dropped 10.6 percent… [European] Supermarket chain Tesco Plc shed 2.9 percent and Carrefour dipped 2.6 percent.
As well they should be. If the Amazon/Whole Foods purchase deal goes through — I use the service all the time*, usually with perfect satisfaction, but even I’m wondering how the company manages to avoid anti-trust sanctions — it could be terrifying for the supermarket industry. If Amazon can teach Whole Foods how to stop being “Whole Paycheck,” it could be Armageddon.
Oh, man, if they cut costs AND set up reliable free grocery delivery then we might as well start teaching cyberpunk novels in business school. Why? Because at that point we’re all living in a classic megacorp world, anyway. On the bright side, there’s a hell of a lot more trees, un-mutated critters, and direct sunlight than we were given to expect, so maybe it’ll be what GURPS calls “cyberprep.”
Moe Lane
*I interrupted writing this to go get a package from Amazon, in fact.
Seems kind of funny considering yesterday I saw where google is building dorms and such for their employees to handle runaway housing costs. I joked that maybe they could set up, let’s call them ‘company stores’ to help employees with runaway food prices. I was thinking more beginning of the twentieth century. Others took it in the more Shadowrun territory.
I suspect that the age of bespoke tailoring and whatnot is going to make a comeback. Oh, maybe not for everyday use. But if staples keep getting cheaper, people are going to have more to spend on luxuries.
Neo-Edwardian perhaps?
That works. With proper dentistry and modern income distribution that era would be quite livable, once of course we detoxed from no longer having information poured into our heads 24/7.
I already make a point of avoiding talking heads ..
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Mew
Going to be? How else do we explain Hipsters and generally any city named Portland?
There was a thing about how hipsters are a contra-synchronous social-signalling waveform that went around within the last year or three, not sure if Moe covered it.
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Portland .. is what happens when an industrial city dies and is re-colonized by artists .. basically what *should have* happened in Detroit, if there weren’t so many street gangs.
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Mew
*Imagines gangs of street artists roaming Detroit*
I .. doubt Amazon will try to lower the prices all that much.
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Two reasons spring to mind …
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Reason the first, because *some of those* high prices will come with high *markups* .. and that means they’ll have plenty of profit.
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Reason the second, because the remainder of those high prices are on products with longer/deeper/special supply chains .. the products cost Whole Foods more because they have unusual/expensive ingredients… there’s no good way for Amazon to fix that.
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Now, what I’m *expecting* is for Amazon to “wreck” Whole Foods as a brand, by introducing lower-quality dreck and substituting typical-store (and Amazon) trash for some of the nicer unusual/expensive products.
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If I wanted to shop at Kroeger/Albertsons/Target/Wallymart, I would ..
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Mew
So my assumption on this deal was that Amazon was going to use it to greatly expand the reach and selection of Amazon Prime Now. If every market that has a Whole Foods nearby gets Amazon Prime Now, they’ll be covering a lot more markets than they were before.
Your post brought to mind, “Amateurs talk about tactics, but professionals study logistics”.
I agree with you, the logistics network is what Amazon really wants. It enables more market penetration as you noted.
Also gets them access to the Whole Goods house brands as well.
Ugh, typo:
Also gets them access to the Whole /F/oods house brands as well.
Logistically, and especially leaving the Whole Foods management structure relatively intact, it gives Amazon the opportunity to study an intact and functional grocery store logistics chain .. and look for synergies with Amazon’s logistics chain.
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Mew
Okay, ran across an interesting statement .. Amazon offers half off Prime to WIC/SNAP/Food Stamps recipients. That’s .. interesting.
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Mew
I do not think that Kroger has all that much to worry about: they own VitaCost. I discovered this company while shopping at Amazon. I signed up for emails and about once a month, along with plenty of offers I have little interest in, I get a 20% off food sale with fast, free shipping for $50 dollars orders. They carry cold pressed oils and mayo, San-J soy sauce, Muir Glen ketchup and canned tomatoes, some really decent single serving Indian food packs and this and that. In other words, things that I use to buy at Whole Foods at a better price.