331–340 of 865 posts
You know the race for global trade dominance is heating up and playing out regionally when the same company tries to buy Slack and Whole Foods in the same week. While one is familiar with conglomerates holding a diverse array of businesses, it's fascinating and slightly unnerving (in terms of market power increasingly concentrated in fewer hands) to see it in motion.
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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.
If I had $20bn to buy it in the first place, or be in the position where I could even raise that kind of capital, I would already be successful (in my mind at least).
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…
Groceries are one of the few large markets that require some proximity to customers due to costs and spoilage. Each grocery store is a type of mini-distribution center for grocery products.
Shipt and Instacart have succeeded to date because they use existing distribution channels and set up marketplaces for the "last-mile" of delivery. This is in contrast to Webvan in the early 2000's who tried to do grocery delivery by building their own distribution and failed spectacularly.
Amazon has become an expert in distribution and logistics. But it is clear that using their current model doesn't generally work with groceries (RIP Webvan, 1998-2001). Bananas need to be treated much differently than books.
So what does Amazon do? But Whole Foods!! A moderate sized grocery store with a significant national footprint and lots of higher income customers.
Now they instantly have a pre-built distribution channel that is already optimized for the grocery business (which again is much different than non-perishable consumer goods etc).
Things definitely just got interesting in this space!! I still believe that Instacart and Shipt can succeed, but they need to maintain a laser focus on making their shoppers and customers happy! And grow as fast as possible while Amazon digests Whole Foods!
[Note: I was the early CTO for Shipt responsible for building their grocery delivery platform and initial engineering team. Go Shipt!]
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Maybe, but the fact that they were just acquired by a company notorious for abusing its low-level employees shows the limitations of this model (as did the pressure they began to face from investors to tighten up on that front when they started to become less profitable).
> Maybe, but the fact that they were just acquired by a company notorious for abusing its low-level employees shows the limitations of this model (as did the pressure they began to face from investors to tighten up on that front when they started to become less profitable). ...or monomania of "the [stock] market," and the myopia of those who look to it to determine what "works."
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Good old investors, so short sighted, they only care about the next 3 months. Whole Foods probably would have been better off as private company, especially with the culture they were trying to create.
> Good old investors, so short sighted, they only care about the next 3 months. Yeah, darn those investors. How dare people with pensions, 401k's, IRAs, and other investments expect some kind of return on their investment? It's disgraceful. /s EDIT: The sentiment against investors is rather ironic considering the amount of equity collectively held by HN readers.
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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…
>if Amazon stop running well then someone else will come along and replace them Is this really true though? Over the past few decades we've seen that if a company is big enough, and it fails, the government will step in and prop it up with a bailout.
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I don't think you can really equate "activist investors" with workaday people with IRAs.
Take a look at how much of a company's stock is owned by institutional investors. A lot of that money comes from people's pensions, 401Ks, IRAs, etc.