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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

#281

Earlier quoted context omitted.

Yeah, I can relate. I probably cook 3 meal kits every 2 weeks when I'm doing them which is on/off, and I feel like it is a time commitment (especially cleanup). So, I could commit 30-45 minutes and get a Blue Apron level meal that's usually ~5/10 experience or commit 15 more minutes to get something really nice one that's ~9/10.

Practice and sharp knives will dramatically change how quickly you can prep, cook, serve and cleanup a blue apron or plated meal. I can usually beat the estimated time by 10+ minutes.

That's awesome... I haven't really invested in good knives yet.

My girlfriend who's been a daily cook for years can look at the meal kit recipes and find ways to parallelize or speed them up that aren't necessarily obvious, like boiling this water before you start prepping, or cooking a thing inside another already hot pan instead of a separate one. I think the directions prioritize easy before fast.

Re: Amazon to Acquire Whole Foods for $13.7B

#282

I'm confused. Amazon is known to work backward from an imagined future press release, and then do the actions necessary to make that press release. How does Amazon see the future in this case? -Amazon already has PrimeNow and Amazon Fresh, which offer a great grocery delivery service. For those who have tried these services, it's easy to see how addicting they are vs going to a physical store. -I can't see Amazon usi…

Amazon has been piloting its Uber Eats competitor (at least in Chicago) as well. I think they call it Amazon Restaurants. This indicates willingness to use small businesses as distribution centers in limited capacity.

Re: Amazon to Acquire Whole Foods for $13.7B

#283
post #19

Earlier quoted context omitted.

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.

>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. Another example of this is Wegmans - http://www.cbsnews.com/news/could-this-be-the-best-company-i... https://www.washingtonpost.com/news/wonk/wp/2015/05/13/why-w... http://www.adweek.com/brand-marketing/why-do-so-many-people-... http://m.csmonitor.com/Business/The-…

And Costco.

Re: Amazon to Acquire Whole Foods for $13.7B

#284
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'm a long time WF stock holder and fan of "alternative" grocers. Since it was Wild Oats. There are some big investors that have been unhappy and applying pressure. WF is fundamentally a regional thing that they made multi regional. It doesn't work everywhere with everybody.

I'm just guessing, but I'd think WF would tighten up the philosophy a little, probably focus on whole and natural foods more than some of the other philosophies as that can scale. That would mean maybe leading a little less with local, FT, and only organic in favor of whole and natural food. Perhaps some more brand name stuff on the shelves. It provides a great way to roll out Go with a customer base that is probably receptive to it. THen I'd expect more technology stuff, curb side pickup, maybe even free delivery from amazon to WF stores for pickup, maybe.

You cant change WF too much or it just breaks and people like it for what it is. I think it would be easier to start a generic grocer from scatch than turn WF in to a safe-way.

Re: Amazon to Acquire Whole Foods for $13.7B

#285
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 difference is the ability for new firms to compete.

With centralized planning, there's only one source. If that source is inefficient or corrupt, that inefficiency and corruption stays around. You can try to regulate, threaten, and police it, but nothing can really take it down.

By contrast, Walmart and Amazon might be very large, but they still have competition. Heck, Amazon started less than 25 years ago. Remember when Walmart was going to be the future of retail? Well, now people say it's Amazon. So, it's one generation for the crown to be passed? Apple was in such dire straits that Michael Dell thought they should close up shop and return cash to shareholders. Now look at Apple. Yahoo had the chance to buy both Google and Facebook. Heck, it wasn't really until the 90s that Walmart became what it is today: Sears and Kmart were the big stores.

The point is that, while companies might have large barriers to entry, competition sneaks in. Walmart looked like no one could compete with it. Today, I wouldn't say it's precarious, but it certainly doesn't look unstoppable. Sears was huge and today people make jokes about it.

Companies like Amazon and Walmart create barriers to entry by building up capital. It certainly does stop some competitors, but I don't think we've seen companies able to hold on for long.

It's also not necessarily about whether the company turns a profit. Government-owned, centrally-planned companies don't turn a profit, but they might be run incredibly inefficiently. It's not just Amazon's low-profit range, but it's efficiency that keeps it where it is. Plenty of companies are being run right now with low to negative profits, but also not being run super efficiently.

How many companies have been "the unstoppable juggernaut" for 50+ years? Can we name a few? AT&T isn't the AT&T from 30 years ago. Remember when AT&T had wireless and home TV and broadband and long distance was king? Well, that company thought long distance was the future, spun off its wireless division and sold AT&T broadband. SBC eventually bought what was left of AT&T on the cheap and renamed itself. Microsoft was the unstoppable juggernaut... and then Apple and Google came along. Walmart was that in the 90s and then Amazon came along, people started using other stores, etc. Heck, Verizon and AT&T seemed like no one could compete with them and then T-Mobile comes along and kicks of an era of amazing growth for them. That's an industry that relies on a limited amount of wireless spectrum that's insanely hard to compete in and T-Mobile started grabbing all the industry growth and forcing the big two to lower their prices and offer unlimited. American automotive companies were once kings and while they still exist, they're a lot smaller and have lost that powerful position. Office supply companies were big and everywhere and OfficeMax and OfficeDepot combined to survive and Staples doesn't seem to be anything powerful. I mean, Staples was started in the mid 80s and had a nice upward trajectory and seem to be on a graceful down-slope. Heck, Blockbuster Video. Talk about a staple of American life. Despite stores everywhere, huge brand awareness, etc. they got toppled by Netflix. Oh, Nokia! They were huge and worth nearly 6x what they're worth today a decade ago. They saw the iPhone and just stalled out. They saw Android and stalled. Finally, Windows Mobile, but it was too late/the wrong OS.

There are certain natural monopoly industries like utilities, but even in the cable TV/internet industry, they're looking less secure for the long run. Many people are cord-cutters for TV, opting for Netflix and other internet-delivered video. Many people watch on tablets which might use 4G rather than WiFi and that's likely to accelerate over the next decade as wireless networks get much faster with much more bandwidth. Tesla seems like it might want to compete with utilities over the long run with a combination of solar roofs and home battery packs.

Amazon is certainly powerful, but so was Walmart as Walmart scurries to stay in the game. It's hard to come up with companies that have really been that juggernaut for long. Walmart was a relatively new entrant against entrenched retailers like Sears. Amazon was a new entrant against Walmart. It's certainly not easy to unseat a powerful company, but it also seems difficult to stay at the top. Whether it's inefficiency, inability to pivot to new ways of doing things, or just markets that dry up as they're replaced by something else, companies have a hard time staying in such powerful positions in our society for long.

And that's the difference between a market with powerful companies and central planning. Central planning would have said that Netflix isn't a worthwhile attempt. We already have all these stores, what will we do with the employees, isn't it a waste to shutter so much investment and capital we've built up in the old way of doing things, the new model doesn't look as good economically (yet), etc. In fact, that's basically what companies do. Shipping DVDs? Ridiculous. You're maybe paying $1 for the round-trip on the DVD (including labor) and charging $10/mo for two out at a time? Seems like it would never work. Shipping books? People want to browse at their bookstore, people want goods immediately, and shipping eats into profits. Ridiculous! Better search? Nah, people want portal sites and Yahoo is the biggest! The iPhone? It doesn't even have a keyboard which is an essential part of devices like Windows Mobile. Wireless and cable? We think the future of AT&T is our long distance service which currently has better margins and lower investment cost than that newer technology.

When you have so much invested in one way of doing something, it can be hard to pivot as the world changes. You become hesitant to kill your cash cows and might not try new things aggressively. In a centrally planned economy, no one challenges that. In a market economy, companies come along and do challenge that. Even when offered their competitor, they often shrug them off! Blockbuster was offered Netflix for $50M. It wasn't profitable at the time and seemed niche - PASS. Yahoo was offered both Google and Facebook and thought the prices were too high. Apple announced its iPhone 6-months in advance and most competitors just thought it was dumb. Luckily, people can pursue these endeavors outside of one, centrally planned company.

Re: Amazon to Acquire Whole Foods for $13.7B

#286
post #180

Earlier quoted context omitted.

Unless all 50 hours are compensated, 10 of them at 1.5-2x base pay, the person working them is getting ripped off. Every one of my friends in engineering (actual engineering, e.g. civil, aerospace, etc.) positions get at least 1.5x for any hour over 40 they work in a week. In fact "unpaid overtime" is something I hadn't heard of for an engineering position prior to working in software. It's almost like workers in thi…

In the US, software developers are exempted from the law requiring 1.5x pay for overtime. Not sure it matters if they're salaried instead of hourly to begin with though.

This is in the US and they're all salaried. Their overtime is computed as a function of the equivalent hourly rate, biweekly pay, etc.

Re: Amazon to Acquire Whole Foods for $13.7B

#287
post #253
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…

The problem with 'conscientious capitalism' is that a competitor will take the idea and run with it, save for the 'conscientious' elements, and push out the original from the market.

I don't know about this. I think it's been over-done to such a degree that actually good customer service is a rare gem to find at this point, and is a better discriminator than price in most products. The price difference is rarely worth the hassle or tension of dealing with bureaucracy or unpleasant people. Or bad websites.. I really can't stand vendors who can't build an easily navigatable, fast website.

I've stuck with my cell vendor because of the customer service, even when the price / coverage wasn't as good as I perceived others would be. I've also left my cable company for a poorer competitor because of the difference in customer service. I've got thousands of miles on United that I never intend to use now.

Re: Amazon to Acquire Whole Foods for $13.7B

#288

https://www.youtube.com/watch?v=cA2-iMz479o I watched this video a while ago about what Amazon Go is a precursor for. In summary, if AWS is renting out server infrastructure for people, then you can imagine that Amazon can make the infrastructure to lease out Amazon Go to other stores. They first integrate it with Whole Foods, then as customers expect no more checkout areas, they will only go to Whole Foods because i…

it's much much harder to license and distribute hardware than it is software.

Re: Amazon to Acquire Whole Foods for $13.7B

#289
post #19
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.

In the 1880s Bismarck increased the modern welfare state (it was called State Socialism https://en.wikipedia.org/wiki/State_Socialism_(Germany) ). The idea was that, if the poor people can get some form of social welfare from the existing state, they're less likely to support a proper socialist/communist revolution. Sounds like that. People won't unionise when they don't think they need to.

Re: Amazon to Acquire Whole Foods for $13.7B

#290

https://twitter.com/dkberman/status/875701677504024576 "Amazon did not just buy Whole Foods grocery stores. It bought 431 upper-income, prime-location distribution nodes for everything it does."

I don't think that is right, Whole Foods stores are already full of...food. They don't have room for hundreds of additional products, never mind tens of thousands.

It's all part of their incredible journey!
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