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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

#41

Post by pjc50 »

phreeza wrote: post #21

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 beca…

The observation was made in "Theory of the Firm" a long time ago that companies tended to be command economies internally, rather than having internal markets; and the hypothesis supported that this is due to informational costs.

WRT redistribution, I suspect the shareholders would jump on that.

Re: Amazon to Acquire Whole Foods for $13.7B

#43

Post by heroprotagonist »

ethbro wrote: post #7

"Da $#&@?!" Sometimes I forget just how big Amazon is. ... But it's nice to know I can get my artisanal, single-source, Fair Trade, organic, small-farm, no-GMO cucumber water with one day shipping now.

Or one-hour shipping with Amazon Prime Now, which is beginning to crop up in a lot of places with Amazon Prime Fresh.

I tried Amazon Prime Now in Denver yesterday to buy some fruit. I went for the free shipping in a 2 hour window instead of the $8 one-hour shipping.

I never used Amazon Prime Fresh, because of the monthly fee and sense of commitment that forces. But when you can get a lot of the same stuff (eg, fresh fruit) without the monthly subscription via Amazon Prime Now, it's more tempting to try out.

I'm a little worried about how big Amazon is getting, though.

Re: Amazon to Acquire Whole Foods for $13.7B

#44

Post by rmoriz »

dx034 wrote: post #31
rmoriz wrote: post #24

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).

Trader Joe's could also play a role. Basically also Aldi, just the other part (Aldi North whereas Aldi stores in the US are run by Aldi South). They have the money and motivation to really fight back and know how to achieve the same cost level as Aldi/Lidl.

ALDI Nord and Süd have some family issues and probably won't combine their US ventures. I see the Schwarz Gruppe (Lidl, Kaufland) as the biggest contender in the US. Kroger is probably gonna have a very bad time.

Re: Amazon to Acquire Whole Foods for $13.7B

#45

Post by bbctol »

codecamper wrote: post #25

Amazon is getting too big. How's this for an investment strategy... Long AMZN, short a basket of all other mid to large retailers & grocers.

Agree on the getting too big; how's this for a political strategy... bust the trusts again

EDIT: and for those pointing out (correctly!) that amazon doesn't violate antitrust, http://www.yalelawjournal.org/article/amazons-antitrust-para... is a good article

Re: Amazon to Acquire Whole Foods for $13.7B

#46

Post by oblio »

bspn wrote: post #37
_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…

I think Zappos is a probably a pretty good proxy. They too had a very different culture to Amazon at the time of acquisition, but I believe it has largely remained intact many years post-acquisition. Amazon as a company has many flaws in its culture (if we are to believe the reports), but they seem to do acquisitions pretty well and know when to leave things alone and let them do their thing.

I think something similar happened with IMDB and Twitch.

Re: Amazon to Acquire Whole Foods for $13.7B

#47

Post by dx034 »

codecamper wrote: post #25

Amazon is getting too big. How's this for an investment strategy... Long AMZN, short a basket of all other mid to large retailers & grocers.

The acquirer stock price often falls after an acquisition. So probably not a really good strategy.

Conglomerates have happened in the past. They become very big until they stop making a lot of money and people realise that they could be more efficient if you split them up. Amazon and Google can afford growing so much because they have a very successful business line. If growth there stops they would likely start selling some parts.

Re: Amazon to Acquire Whole Foods for $13.7B

#48

Post by pjc50 »

rmoriz wrote: post #24

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).

Aldi/Lidl have really taken over in the UK in the last 10 years. I'm not really sure how they manage it - more, smaller stores?

Re: Amazon to Acquire Whole Foods for $13.7B

#49

Post by emodendroket »

phreeza wrote: post #21

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 beca…

I don't think large monopolies really point to everyone moving toward a planned economy; they're the natural tendency of capitalism and the opposite is only maintained by vigorous regulation and intervention.

Re: Amazon to Acquire Whole Foods for $13.7B

#50

Post by emodendroket »

AndrewDucker wrote: post #35
phreeza wrote: post #21

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 beca…

The major difference is that if Amazon stop running well then someone else will come along and replace them. Whereas government is a monopoly, so if it runs badly then it doesn't automatically get replaced. Now, democracy is supposed to fix this, by allowing you to vote for a different supplier of government every few years. But because of the voting system in some countries (like the US and the UK) it's actually rea…

A large business has a lot of tools at its disposal to snuff out upstart competitors in a permissive legal environment like we live in today.
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