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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

#571

Post by emodendroket »

jdmichal wrote: post #372
airza wrote: post #336

Earlier quoted context omitted.

who the fuck has a 401K and is interested in short term returns?

You know at some point the 401k is supposed to be paying your bills, yes? That's its raison d'être. When you have investments paying your bills, you might understandably be focused on those investments yielding some immediate returns. Maybe to pay for that leaky roof, or broken down AC...

Why in the world would you have more than a token amount of assets in stock if you are nearing or in the middle of retirement?

Re: Amazon to Acquire Whole Foods for $13.7B

#572

Post by TAForObvReasons »

panarky wrote: post #567
rmc wrote: post #289

Earlier quoted context omitted.

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.

This is a great discussion of company culture, treatment of employees, worker cooperatives, etc., but I hoped HN would go deeper into the business and technology implications. What is the strategic logic behind this move? NYT, WaPo, WSJ, Bloomberg all take the same line: this is about Amazon's expansion into brick-and-mortar retail. They need a physical footprint, knock out Instacart for delivery, accelerate Amazon G…

It's worth pointing out that the purchase, as based on today's price action, was effectively "free".

Amazon market cap went up 3.5% as of the current tick, roughly $15.5B. The market effectively rewarded AMZN for the transaction far beyond the actual $13.7B tender offer!

Re: Amazon to Acquire Whole Foods for $13.7B

#573

Post by petra »

steego wrote: post #304
AndrewDucker wrote: post #23

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."

Meh. 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…

That surely makes a lot of sense. But in theory at least, Amazon's fulfillment platform is supposed to be the solution for retailing the "long tail", and it had worked very well in regular e-commerce.

So why did it fail with food ?

Re: Amazon to Acquire Whole Foods for $13.7B

#574

Post by salehk »

_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 don't think it'll change much. it's in Amazons best interest to keep whole foods the same. any changes to its culture would make them lose even more customers and whole foods has been on a decline the past few months.

Re: Amazon to Acquire Whole Foods for $13.7B

#575

Post by naravara »

Steve44 wrote: post #548
devmunchies wrote: post #417

Earlier quoted context omitted.

> margins are razor-thin at any other grocery store, yes

I think they have higher costs too. In the UK their sites are in High Street locations unlike most other grocery stores. They also have a lot more front of house staff and have very high quality standards for their products and displays. That all costs and eats away at the raw cost-of-goods margin.

And it's not just an idiosyncrasy to maintain that stuff either. If they don't maintain the perception of being a premium brand/neighborhood anchor people will stop shopping there.

Whole Foods gets higher margins because their customer base cares more about various intangibles beyond just the value-for-money. Take those intangibles away and suddenly you're competing on value-for-money alone and Walmart will eat your lunch while smaller, independent grocers go after your dinner.

Re: Amazon to Acquire Whole Foods for $13.7B

#576

Post by azernik »

jules wrote: post #210
pjc50 wrote: post #41

Earlier quoted context omitted.

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.

Wasn't Google a market economy internally?

The Theory of the Firm claimed that those information limitations were the limiting factor on firm size, bit a motivation. (Motivation for large firms being to avoid transaction costs.)

Some very large companies, like Google/Alphabet and Samsung, are more focused on concentration of wealth (ie functioning as holding companies) than on avoiding transaction costs, and hence have internal market economies.

Hence oddities such as Samsung's semiconductors division selling screens and memory, often custom-designed, to the competitors of Samsung's cellphone division - they act as separate companies reach pursuing their own profit.

In that sense, conglomerates are sometimes not "firms" in the traditional economic sense.

Re: Amazon to Acquire Whole Foods for $13.7B

#577

Post by odonnellryan »

ghaff wrote: post #138
ccorda wrote: post #106

Earlier quoted context omitted.

Place an order by noon for groceries plus anything you want from Amazon. Amazon fills up truck(s) at whatehouse and drops off at local Whole Foods. Stop by on your way home from work and they bring your items to your car. You get free same day delivery. Amazon just greatly saved on last mile delivery costs. That's the value of those nodes without having to store all the inventory.

Hannafords has a place an order and pick it up model. Anecdotally, based on my local store, hardly anyone uses it. I suspect it's a narrow niche where people are happy to order on their computer but want to save a few $$ on delivery.

Personally, I've tried many:

- Local supermarket (pickup and delivery)

- Amazon Fresh

- Services like BlueApron

BlueApron is a WAY better value, IMO. This is where I see the future being. It's fun, healthy (very), promotes sustainability, is fairly cost-effective (once you consider they deliver it as part of the cost) and is worry-free.

Shopping on Amazon still means I have to shop. Might as well take 5-10 minutes and go to the store :)

Re: Amazon to Acquire Whole Foods for $13.7B

#578

Post by tovacinni »

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.

On the other hand, Kiva Systems which is now Amazon Robotics is apparently now a terrible place to work. :(

Re: Amazon to Acquire Whole Foods for $13.7B

#579

Post by naravara »

scotchio wrote: post #63
illumin8 wrote: post #55

Earlier quoted context omitted.

Disclaimer: I work for AWS, but my opinions are my own. I don't think you have much to worry about if you're a WF employee. Amazon actually treats their employees very well. In my experience here, I've never seen any of the things the NY times article talked about, either on my team or any other team I've interacted with. People have a healthy work/life balance (40-50 hours a week), get paid very well (definitely abo…

I mean to be fair, most of the jobs at WF stores ARE unskilled labor though.

Our proclivity to treat all “unskilled labor” as if the people doing them are trained monkeys is one of the reasons customer service in large retail stores is so often horrible.

If you treat your people like valuable members of society/your organization they will develop and improve on the actual skills that an unskilled job needs, like anticipating problems, knowing when an how to escalate issues, being warm to customers, being knowledgeable about the business and your products, and hustling when needed.

If your treat your people like disposable chattel then they’ll show up to punch a clock, check the boxes, and get out as soon as possible.

Re: Amazon to Acquire Whole Foods for $13.7B

#580

Post by KekDemaga »

TAForObvReasons wrote: post #572
panarky wrote: post #567

Earlier quoted context omitted.

This is a great discussion of company culture, treatment of employees, worker cooperatives, etc., but I hoped HN would go deeper into the business and technology implications. What is the strategic logic behind this move? NYT, WaPo, WSJ, Bloomberg all take the same line: this is about Amazon's expansion into brick-and-mortar retail. They need a physical footprint, knock out Instacart for delivery, accelerate Amazon G…

It's worth pointing out that the purchase, as based on today's price action, was effectively "free". Amazon market cap went up 3.5% as of the current tick, roughly $15.5B. The market effectively rewarded AMZN for the transaction far beyond the actual $13.7B tender offer!

That is a great observation. Something like that is unimaginable to me.
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