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Amazon to Acquire Whole Foods for $13.7B

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Re: Amazon to Acquire Whole Foods for $13.7B

#21

Post by phreeza »

Somewhat off topic, but I have had a weird thought circulating in my head (triggered by reading Red Plenty) that I wanted to put out there:

What is the relationship between a centrally planned economy as for example Gosplan was trying to run in the USSR, and the presence of these huge market-like but centralized entities like Amazon and Wal-Mart inside a free-market economy? This becomes particularly interesting because Amazon apparently does not have any particular interest in turning a profit.

A central problem faced by Gosplan was the collection of high quality data about supply chains and the estimation of the utility function of consumers. I would say Amazon is in a pretty good position to do both right now.

Another question, somewhat related: At what point does it become profitable for Amazon to lobby for more redistributive taxation? This might sound paradoxical because you would assume that Amazon represents the interests of it's owners, who would probably suffer under such a taxation scheme. But shouldn't there be a point at which giving more disposable income to poor people will boost the overall income of an entity Amazon (since Amazon doesn't sells many flat-screen TVs but not as many mansions or yachts)?

Re: Amazon to Acquire Whole Foods for $13.7B

#22

Post by StevePerkins »

Wow... all the articles I've been reading about Whole Foods lately deal with how they're hurting, and losing market share to more affordable competitors like Trader Joe's.

If this is about Amazon thinking they can turn things around for Whole Foods, then it will certainly mean drastic changes to price, selection, and employee structure.

If this is about Amazon using a brick-and-mortar chain as a tool to help Amazon's own ventures (e.g. grocery delivery, local storage for same-day deliveries, product return and support locations, etc), then it will certainly mean drastic changes what a Whole Foods store even is.

Either way, I can't imagine a course in which Whole Foods as we know it isn't basically over. Which doesn't necessarily bother me (I migrated to Trader Joe's and similar competitors long ago), but does seem like a big deal in the grand scheme of things. The grocery industry was heading in a Walmart-ish direction... and Whole Foods was almost single-handedly responsible for bringing a counterculture into the mainstream, and forcing all the other chains to reverse course and up their game.

Re: Amazon to Acquire Whole Foods for $13.7B

#24

Post by rmoriz »

Looks to me like the ultimate war between grocery stores in the US will be fought out between Amazon/WFM (premium, delivery) and ALDI/Lidl (discount, no-frills).

As a German I'm amazed by the "food haul" videos on YouTube and the positive feedback for ALDI US (belongs to ALDI Süd), Trader Joe's (ALDI Nord) and Lidl (part of Schwarz Gruppe, they just started in the US yesterday).

Re: Amazon to Acquire Whole Foods for $13.7B

#26

Post by dx034 »

pc86 wrote: post #19
_7siz wrote: post #10

Oof. I wonder what this means for Whole Foods culture and employees. If you don't know, John Mackey, the CEO / founder, is a major believer in conscious capitalism and of empowering his employees. Whole Food employees get paid pretty darn well with some crazy good benefits for their industry and line-of-work (UNION FREE most of the time too!). WF banks on them being true believers and motivators of the cause - includ…

It's nice to see non-union employees treated well and paid well, not because of any negative feelings toward unions or unionization, but because I think it shows that you can be a successful capitalist without trying to suck every ounce of productivity and profit out of your lowest-paid employees.

While I fully agree that it's great to see employees treated well, Whole Foods is not an example that you can be a successful capitalist this way. They worked well for a while but the reason they got bought now is because they struggled over the past years. Probably unrelated to their treatment of employees (US groceries is very competitive at the moment) but AMZN didn't buy a hugely successful company.

Re: Amazon to Acquire Whole Foods for $13.7B

#28

Post by srameshc »

_7siz wrote: post #10

Oof. I wonder what this means for Whole Foods culture and employees. If you don't know, John Mackey, the CEO / founder, is a major believer in conscious capitalism and of empowering his employees. Whole Food employees get paid pretty darn well with some crazy good benefits for their industry and line-of-work (UNION FREE most of the time too!). WF banks on them being true believers and motivators of the cause - includ…

This is exactly what came to my mind. I hope Amazon keeps the Whole Foods culture alive and let it run independently.

Re: Amazon to Acquire Whole Foods for $13.7B

#29

Post by tedmiston »

djhworld wrote: post #5

I wonder if they'll roll out the tech they showed a few months ago for the store in Seattle where you didn't have to check out.

The impression I got was that the store is more of an R&D project. It didn't work super well or scale with number of people so they had to artificially limit food traffic to keep it working. I'd be surprised if they rolled that out in an environment as busy and complex as Whole Foods stores so fast (or ever).

Re: Amazon to Acquire Whole Foods for $13.7B

#30

Post by jasode »

_7siz wrote: post #10

Oof. I wonder what this means for Whole Foods culture and employees. If you don't know, John Mackey, the CEO / founder, is a major believer in conscious capitalism and of empowering his employees. Whole Food employees get paid pretty darn well with some crazy good benefits for their industry and line-of-work (UNION FREE most of the time too!). WF banks on them being true believers and motivators of the cause - includ…

If Amazon acquisition of Zappos shoes is an indicator, Jeff Bezos let Tony Hsieh (CEO) continue to keep the culture. Hsieh said in past interviews that Bezos if fairly hands off. There was still some business "synergy" in the acquisition because Zappos logistics got integrated into the Amazon warehouse in Kentucky.

Whether Bezos treats Whole Foods the same probably depends on whether he has confidence in existing management. It's also possible he has ambitions to totally remake WF into something else. In that case, it doesn't matter what managers are there because Bezos wanted the Whole Foods market presence and not the management team.

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