Amazon to Acquire Whole Foods for $13.7B

“The whole premise [of online grocery] is that you’re saving people a trip to the store, but people actually like going to the store to buy groceries.”

“A bunch of smart people at Amazon have been thinking about re-imagining the next phase of physical retail. They want more share of the wallet, and habitual, frequent use of Amazon for groceries is the ultimate goal.”

"Long term, a stronger grocery business could position Amazon to become a wholesale food-distribution business serving supermarkets, convenience stores, restaurants, hotels, hospitals and schools. "

"A group of Amazon executives met late last year to discuss the disadvantage Amazon faced compared with grocery competitors such as Wal-Mart and Kroger because of its lack of physical stores and customer apprehension about buying fresh foods online. They decided they needed something more to jump-start Amazon’s grocery push beyond plans already under way for the Amazon Go convenience store, modeled for urban areas, and drive-in grocery pick-up stations suited for the suburbs."

[1] https://www.bloomberg.com/news/features/2017-03-20/inside-am...

This deal is about expansion, not about tapping into 431 measly location. Amazon knows they can set up satellite warehouses a lot faster and cheaper than they can create a store.

Let's be clear. Whole Foods is not a commodity food supplier. They enjoy high margins because they have cultivated quality and consciousness into their products. They did to food what Apple did to computers. They added the right mix of intangibles with a sense of mission and purpose that people can many buy into. Add on top of that, and Whole Foods adds an expertise procuring a catalog of high-end suppliers for both packages and fresh foods and the safe handling of those foods.

This deal should significantly improve Amazon's food delivery offerings. As a food snob and target demographic, I can say this will significantly improve my chances of using Amazon's food delivery service. I've used it in the past, but wasn't satisfied because I was disappointed with the quality and selection. It wasn't bad, it just wasn't great.

I suspect most people will not be willing to buy the high-end products, but that's not the point. The point is the high-end/high-margin products will be available so shoppers won't have to go out and do supplementary shopping to get the "good stuff". If online grocery shopping is going to become viable, they need to make sure they reduce the need for supplementary shopping as much as possible. Having a leg and data from a real grocery store will help them figure out what they need to do to improve.

Same as Uber, but instead of moving people, they're moving milk & eggs.

I disagree with almost every word of it, but I don't think it contradicts the idea of "conscious capitalism" or treating your employees well.

He also sort of regrets his "fascism" comment:

> "Well, I think that was a bad choice of words on my part ... that word has an association with of course dictatorships in the 20th century like Germany and Spain, and Italy. What I know is that we no longer have free enterprise capitalism in health care, it's not a system any longer where people are able to innovate, it's not based on voluntary exchange. The government is directing it. So we need a new word for it. I don't know what they right word is," Mackey says.

- http://www.npr.org/sections/thesalt/2013/01/16/169413848/who...

Although, fascism doesn't just have "an association" with dictatorships, that's literally what it means. Government controlling industry is basically a side effect.