Amazon to Acquire Whole Foods for $13.7B • Hacker News Board

Re: Amazon to Acquire Whole Foods for $13.7B

#91

Post by loudin » Fri, Jun 16, 2017, 1:41 PM UTC

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.

I think this is a different beast. I personally loved shopping at Whole Foods because the food is high quality and their employees are treated well. These tenets are totally incompatible with Amazon's culture. Sure, now they say they will run it independently, but if Amazon were to struggle with Whole Foods, the first thing they do will be to lower labor costs and food costs.

Unions to protect workers are now more important than ever in this new age of monopolies.

Re: Amazon to Acquire Whole Foods for $13.7B

#92

Post by tuna-piano » Fri, Jun 16, 2017, 1:41 PM UTC

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 using existing retail stores as distribution centers. I would think you really only need one grocery distribution center for each city in America, and PrimeNow (and AmazonFresh) already has that! Or, has Amazon determined that picking/packing from a retail store is actually efficient? Retail as a DC seems tough to automate, items are in the wrong spot, suspiciously missing, etc. I don't get it.

-I would have guessed that online grocery from highly automated distribution centers is where the majority of the market would be within ~20 years. Does Amazon, the king of online, not think that!?

-Or does Amazon just believe that they can run Whole Foods better than it is currently run?

-Do they just want the purchasing, existing relationships, etc to also sell their customers through other channels?

Re: Amazon to Acquire Whole Foods for $13.7B

#93

Post by illumin8 » Fri, Jun 16, 2017, 1:41 PM UTC

opportune wrote: post #80

illumin8 wrote: post #71

Earlier quoted context omitted.

Not true. I know several people that have good careers at WF and would be offended by the fact that you think they are unskilled. Seasonal workers in the FCs literally get only 4 hours of training and are then filling orders. That's the pure definition of unskilled, and a far cry from a pastry chef at WF.

That's not what unskilled means in this context. It just means that they are easily replaceable and not specialized. You can have respect for people as individuals while recognizing that the job they do could be done by just about anybody (the definition of unskilled)

A pastry chef is unskilled?

Re: Amazon to Acquire Whole Foods for $13.7B

#94

Post by blantonl » Fri, Jun 16, 2017, 1:41 PM UTC

ckastner wrote: post #65

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."

$13.7B / 431 = $31.79m per store. I have zero experience with real estate prices for retail outlets, but it feels as if that's a bit on the high end?

  * distribution network
  * store stock
  * employees
  * high end real estate

Sounds like a great deal for Amazon

Re: Amazon to Acquire Whole Foods for $13.7B

#95

Post by brad0 » Fri, Jun 16, 2017, 1:41 PM UTC

davidiach wrote: post #3

I wonder if they will keep the brand or change it to Amazon.

Most likely they'll keep it. Amazon has acquired brands in the past and kept their name. Twitch is a good example.

Re: Amazon to Acquire Whole Foods for $13.7B

#96

Post by Joakal » Fri, Jun 16, 2017, 1:41 PM UTC

emodendroket wrote: post #32

pc86 wrote: 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.

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).

Treating them above market or not, Amazon acquired the company for billions and not because Whole Foods was doing badly.

Re: Amazon to Acquire Whole Foods for $13.7B

#97

Post by JackFr » Fri, Jun 16, 2017, 1:41 PM UTC

phreeza wrote: 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…

No one has given more disposable income to poor people than Wal-Mart and Amazon. It just hasn't come in the form of wages.

Re: Amazon to Acquire Whole Foods for $13.7B

#98

Post by phreeza » Fri, Jun 16, 2017, 1:42 PM UTC

izacus wrote: post #77

AndrewDucker wrote: post #35

Earlier quoted context omitted.

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…

Hmm, as I remember the socialist governments were replaced (not easily, but they were). Have we even seen a conglomerate of AMZN size replaced in living memory?

Not quite the size, but on the same order of magnitude when adjusted for inflation: Enron.

Re: Amazon to Acquire Whole Foods for $13.7B

#99

Post by opportune » Fri, Jun 16, 2017, 1:42 PM UTC

illumin8 wrote: post #93

opportune wrote: post #80

Earlier quoted context omitted.

That's not what unskilled means in this context. It just means that they are easily replaceable and not specialized. You can have respect for people as individuals while recognizing that the job they do could be done by just about anybody (the definition of unskilled)

A pastry chef is unskilled?

How many employees at WF are pastry chefs and how many are in stocking, orders, cleaning, and manning the register?

Re: Amazon to Acquire Whole Foods for $13.7B

#100

Post by Eric_WVGG » Fri, Jun 16, 2017, 1:42 PM UTC

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."

I'm not saying that renting is worthless, but it's worth noting that Whole Foods rents their property. Amazon is buying a network, not earth and bricks.