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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

#821

Post by puranjay »

laretluval wrote: post #655
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…

> Customers already trust Whole Foods and they like the assortment, but (1) only a small percentage of the population has access to a store, and (2) an even smaller percentage of the population can afford it. > What if this is about taking the Whole Foods concept online in a big way ... make it dramatically more efficient, aggressively lower prices, and deliver all this goodness to a far larger percentage of the popu…

What if you increase efficiency and cheapness in non visible areas that customers don't get to see?

Re: Amazon to Acquire Whole Foods for $13.7B

#822

Post by puranjay »

deong wrote: post #499
wooter wrote: post #401

Earlier quoted context omitted.

no thanks. look at what collective/forced/politicized bickering over hours has done to the job market everywhere its been tried. look at the corruption. i enjoy my freedom to negotiate my terms as I, as an individual, and my employer see fit.

I lived and worked in Iceland for five years, and they have a virtually 100% unionization rate. It's handled at the industry level rather than individual companies, but when you start a job, you are pretty much automatically enrolled in the union relevant for your work. A little money comes out of your paycheck, and the union is there in case you have problems. The unions also provide other benefits. For example, mos…

I'm always skeptical whenever someone parades a Scandinavian country as an example of anything. The nature of their economies (Norway's massive oil wealth, for example) and the size of their populations means that lessons from these countries are rarely applicable to the US, China, India or other large countries.

Re: Amazon to Acquire Whole Foods for $13.7B

#823

Post by puranjay »

clutchdude wrote: post #217
bspn wrote: post #37

Earlier quoted context omitted.

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.

There's also Woot.com - a company who's culture was a strange counterpoint. Amazon thought they understood it, messed it all around and now it's a sad parody of the former site. https://www.dmagazine.com/publications/d-magazine/2014/july/... That particular bit about Bezos and the octopus sells it - You'll be fine if Amazon "gets" your company and it's culture. If not, well...

I remember Woot's founder, Matt Ruttledge, mentioning how he didn't get along with Bezos at all.

Re: Amazon to Acquire Whole Foods for $13.7B

#824

Post by lwlml »

throwaway9980 wrote: post #795
lwlml wrote: post #182

Earlier quoted context omitted.

The Kroger-based store where I live just botched a floor-plan change so badly I should hope that it was just a local screw-up. This particular grocery store went from okay to "penny-thriftstore" useless.

Kroger is the primary grocery store in my neighborhood and I shop there at least once a week. Despite that, I can never quite grok the store layout. It feels like it's been designed to make it impossible to find the last three items on your list so that you will roam the store endlessly picking up random impulse items while hunting your white whale condiment.

This makes me wonder, has anyone used the Walmart "drive-up" shopping system where you shop online, drive to a specified location and they load your groceries after you pay?

Re: Amazon to Acquire Whole Foods for $13.7B

#825

Post by dkrich »

omarchowdhury wrote: post #752
dkrich wrote: post #143

I don't mean to be a naysayer, I don't really know what this means. But with all of the euphoria I'm hearing regarding Amazon and the doom-and-gloom regarding "traditional" grocers, I can't help but remind myself how horribly bad people are at predicting the future. Most of the people I'm hearing make predictions about what this means have been wrong about everything to this point. Not saying it won't be a game-chang…

Scott Galloway predicted AMZN buying WFM last month: http://www.businessinsider.com/scott-galloway-explains-exact...

I saw this and I give him credit although I think his idea that Amazon will be the only winner is pretty irrational. Less than 10% of purchases made today are online and even with that number growing, there are lots and lots of very smart companies with tremendous resources who can compete, not to mention lots of very smart people who can innovate in this space in ways Amazon won't think of and disrupt them. It happens virtually every time a newcomer is predicted to become monopolistic.

Re: Amazon to Acquire Whole Foods for $13.7B

#826

Post by lwlml »

amelius wrote: post #594
lwlml wrote: post #153

Amazon is now (or more so now) like Evil Corp in the Mr. Robot kind of way. You can ship your Evil groceries via Evil Prime purchased via voice-command with your Evil assistant device paid for with your Evil credit-card. Evil. Frankly I don't buy as much from WF anymore considering that what they carry is much more like "organic junk-food" than actual food. If you really want to support the "cause", find yourself a l…

Business is just too easy when you're big. I think we need something like progressive economic barriers. Right now this seems inverted, with all the barriers at the "entry" level.

I don't think there are barriers at the "entry" level at all. You can't build something like Amazon or Walmart over-night, the sustain and focus in these corporations are only doing what the economic "fitness function" tells them to: Sell more stuff at a lower price with lower costs [and quality]! When these systems get so large and impersonal, fraud can only escalate--fake goods sold to invisible personas who can only write strongly worded letters that are immediately tossed into /dev/null, if they even knew what /dev/null was.

This will always come back to bite us all because you cannot legislate long-run self-destructive self-interest away. Consumers will almost always prefer the lowest price and wholesalers will prefer to move more units in fewer transactions to retailers--because that is less work for more money. Once you get big enough to influence the wholesaler/manufacturer price everyone is captured and if you introduce a "price freeze" in an attempt to make people more "equal" welcome to a world of shortages and more robust black market/System D environments.

This is a cultural/people problem--not a legal problem--that is not likely to go away any time soon short of a particularly bad pandemic that changes the focus away from price to authentic relationships between people. I've got no problem dropping $25 for a 5# pasture-raised chicken raised by wonderful people, but other people less fortunate must buy the $1.99# factory-fresh-concentration-camp-chicken from Walmart because they need to eat, you know?

Re: Amazon to Acquire Whole Foods for $13.7B

#827

Post by visvavasu »

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!

Thanks

Re: Amazon to Acquire Whole Foods for $13.7B

#828

Post by visvavasu »

femto113 wrote: post #562
j2bax wrote: post #212

Earlier quoted context omitted.

Amazon is a tech and logistics company. I doubt very much that their strategy is "buy random company, lower pay of employees, profit". This was a very strategic move for them and I am sure they intend to use their tech and distribution platform to increase the profit, rather than slice and dice the store experience and quality at the local level. This is what differentiated WF from many other grocery stores that I'm…

Pure speculation but I'm guessing their strategy here has a few elements: - they need to get to meaningful scale on the buy side of the grocery business which they weren't able to do on their own - Whole Foods is already a "tech friendly" grocery brand (Instacart, Apple Pay) - Whole Foods has a lot of premium/value add and non-grocery products (prepared food and organic underpants and such) that offer more profit mar…

Interesting

Re: Amazon to Acquire Whole Foods for $13.7B

#829

Post by Applejinx »

KekDemaga wrote: post #580
TAForObvReasons wrote: post #572

Earlier quoted context omitted.

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.

You've got to be able to understand it, though, to make sense of market capitalism. Basically if the stock went up the price of that acquisition plus two billion dollars, that is a very powerful price signaling and a difficult command to disobey.

It means there's an opportunity cost: all other things being equal, it would cost Amazon two billion dollars in market capitalization to NOT do whatever the hell Wall Street THINKS they're going to do with Whole Foods.

Maybe the market thinks they're going to use them as bases for grocery distribution: reward, the cost of acquisition plus a bonus two billion. Maybe the market thinks they're going to gut the company, fire everybody, and then there's one less competitor for what Amazon means to do with groceries! Maybe the market thinks they'll take the existing Amazon grocery stuff and rebrand it Whole Foods and the rabble will buy into that for a time.

The point is that this money really isn't free: it's conditional on whether Amazon does what the investors think they're gonna do, with the acquisition. If Amazon fails to do that, the market capitalization can evaporate.

My own hunch is that the market thinks Amazon is super efficient and acquisitive, and that Whole Foods is weak and inefficient and misguided. As such, the expectation of greedy and amoral investors is that Amazon will take over and whip Whole Foods into shape, maybe even fire everybody and replace 'em with Amazonians, and that will make Whole Foods 'better' and justify the exercise. They certainly aren't buying into Whole Foods' 'enlightened' memes: that has no place on Wall Street.

So I'm guessing it's BECAUSE Whole Foods has been 'enlightened' that the prospect of wrecking that so motivates investors. They figure that the Amazon way is clearly the winning way, and they figure there will be a BIG difference in how things are done, and it's a difference they characterize as 'good for capital', so there's a synergistic effect that makes it 'free' for Amazon plus a bonus. And then Amazon is obligated to do what's expected of them, which I think is probably kinda predictable.

Re: Amazon to Acquire Whole Foods for $13.7B

#830

Post by alanfalcon »

SeeDave wrote: post #489
alanfalcon wrote: post #314

Earlier quoted context omitted.

Zappos CS, front office, creative staff (etc.) got to keep their culture. Zappos warehouse workers got shafted.

Would it be possible to expound on this comment with a decent source (first party is totally okay!)? I ask not as a personal attack on your credibility, this comment just seems a bit inconsistent with the Holacracy movement that he championed a couple of years back.

https://pando.com/2012/06/06/zappos-hands-over-warehousing-t... - as you can see, the warehouse isn't included in any of the good stuff, it was just unceremoniously handed over to Amazon to be run as Amazon warehouses are run.

I agree that this is inconcsistent with the Holacracy movement (even if the move preceded the movement officially, clearly these workers were never fully Zappos employees in Tony's eyes, which is sad).

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