181–190 of 865 posts
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…
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).
Don't count out Kroger, the largest supermarket chain in the US. According to Wikipedia in 2015 it trailed only Walmart and Costo in worldwide revenue, and had 20% more revenue than Amazon. https://en.wikipedia.org/wiki/Retail#Global_top_ten_retailer...
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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 this is a different beast. I personally loved shopping at Whole Foods because the food is high quality and their employees are treated well. These tenets are totally incompatible with Amazon's culture. Sure, now they say they will run it independently, but if Amazon were to struggle with Whole Foods, the first thing they do will be to lower labor costs and food costs. Unions to protect workers are now more im…
Because Amazon can better monetize WF: backing with Amazon's logistics chain, expanding grocery delivery, cross-marketing with customer's existing Amazon purchases, and using WF's real estate for warehousing stock closer to affluent customers for one hour deliveries.
I absolutely agree they'll be tempted to squeeze costs, but I think there's a viable financial option to run WF as-is and still accrue benefits to the greater-Amazon.
I wonder how long until the first beta of Elastic Grocery System?
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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 sell…
> 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. Yeah, who could forget when companies like Standard Oil or AT&T decided to split up, entirely through the power of market forces, with no government intervention at all.
Standard oil and AT&T were not broken up because they were conglomerates. They were broken up because they were monopolies in single (or closely related) markets.
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The day I sell a company for $13Bn I will declare myself successful. Not everything is going to be a a half a trillion dollar company.
Not if you bought it for $20bn. Wholefoods is publicly owned and the price that Amazon pays is below their price a few years back. It's not about size, $13bn is a lot of money. But Wholefoods needed a strategy or buyer, otherwise they would've faced serious problems in a few years.
People seem to think it will be bought, but this would seem to be negative news because the price paid for Whole Foods was about half what Sprout's is trading at.
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…
Yes I think we'll see more customer tracking (data of high-incomers) and more automated checkouts.
And eventually an "organic-lite" low-end brand.
These aren't even particular to Amazon, just competitive measures. WF has spawned a number of competitors in the last 5-10 years. Amazon is just brusque enough to do it.
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Treating them above market or not, Amazon acquired the company for billions and not because Whole Foods was doing badly.
A lot of time when companies like that get acquired, someone is hoping to profit on the difference between the purchase price, and the value of the company when the management culture switches to wringing every last bit of productivity out of employees. Amazon might have a more strategic goal, but the above strategy is a common one.