Author Topic: Amazon to Buy Whole Foods  (Read 14769 times)

MMMarbleheader

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Amazon to Buy Whole Foods
« on: June 16, 2017, 08:25:30 AM »
http://money.cnn.com/2017/06/16/investing/amazon-buying-whole-foods/index.html

This deal is interesting because I wonder if Amazon will use whole foods supply chain to beef up their amazon pantry/fresh to compete with Costco. I love Costco but if Amazon can get close to them price wise and I don't have to go to Costco, sign me up.

Vindicated

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Re: Amazon to Buy Whole Foods
« Reply #1 on: June 16, 2017, 08:32:16 AM »
It seems like a really good fit for Amazon's goals.  I'm excited to see how Amazon will incorporate Whole Foods into their business.

I've heard of AmazonFresh, but we've never used it.  Anyone have experience with it, and have a hypothesis for how the Whole Foods acquisition will grow this business?

WSUCoug1994

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Re: Amazon to Buy Whole Foods
« Reply #2 on: June 16, 2017, 09:52:19 AM »
This is an interesting/aggressive move even for Amazon.  Amazon (is a client of mine) feels that the company that wins Grocery wins in online retail due to the % of spend in the home.  Walmart is much more of a threat here than Costco as Walmart's retail footprint combined with their online grocery success in Europe has given them a first mover advantage.  The issue that has caused Amazon's Fresh business the most trouble is automation and replacement.  It is hard for them to design machines to properly select fruit that is good vs bad.  Secondly if they are out of green beans - what I would happily substitute for green beans is different than what you would substitute.  For some people, they dont want any components of the meal if the beans are not available.  Amazon's Fresh business is growing at a reasonable rate but perishable inventory is a very hard nut to crack.  The whole foods acquisition would give them a regional footprint that would double as a distribution facility for local food delivery.

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Re: Amazon to Buy Whole Foods
« Reply #3 on: June 16, 2017, 09:56:48 AM »
I just hope this somehow lowers the cost of food at Whole Foods. Probably won't, but I can dream.

anonymouscow

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Re: Amazon to Buy Whole Foods
« Reply #4 on: June 16, 2017, 10:05:32 AM »
It seems like a really good fit for Amazon's goals.  I'm excited to see how Amazon will incorporate Whole Foods into their business.

I've heard of AmazonFresh, but we've never used it.  Anyone have experience with it, and have a hypothesis for how the Whole Foods acquisition will grow this business?

Doesn't seem like a great fit to me.

Amazon seems to be about large selection, low price, convenient.

Whole foods... low selection, high prices, maybe you can make it convenient?

Walmart / Sam's club seems more like what Amazon should be for a store location, large selection, low prices, order online and pick up for free.

thisisjames

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Re: Amazon to Buy Whole Foods
« Reply #5 on: June 16, 2017, 10:12:13 AM »
Makes sense to me. This an clear strategy for them to quickly deploy brick and mortar stores.

Whole Food's demographics and locations probably coincides well with savy Amazon prime shoppers. 

wildbeast

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Re: Amazon to Buy Whole Foods
« Reply #6 on: June 16, 2017, 10:13:20 AM »
I know I'm in the minority here, but... Amazon is just like Walmart in their quest to eliminate small businesses and get rid of local jobs.  I think those of us who can afford it should support local businesses and jobs.  I don't live in a bubble and I try to think of how my actions affect my neighbors, especially those in less privileged circumstances.

I've been a bit disappointed in the MMM community's lack of interest in being a part of the local community.  I get the sense that's it all about looking out for #1, regardless of how it affects others.  That mentality makes me sad.

Travis

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Re: Amazon to Buy Whole Foods
« Reply #7 on: June 16, 2017, 10:22:45 AM »
I just hope this somehow lowers the cost of food at Whole Foods. Probably won't, but I can dream.

I'm curious what their long-term goals for the brand are.  Will they change what Whole Foods essentially is, or will they rename it and radically change how it does business?  I imagine the chain is quite profitable by its current model and that seems to me to be a reason to keep it largely intact.  I don't spend a dime at WF, but I have a lot of friends where that is their primary grocery store.  I imagine their going to be a little nervous for the next few months.

NathanP

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Re: Amazon to Buy Whole Foods
« Reply #8 on: June 16, 2017, 10:23:37 AM »
I know I'm in the minority here, but... Amazon is just like Walmart in their quest to eliminate small businesses and get rid of local jobs.  I think those of us who can afford it should support local businesses and jobs.  I don't live in a bubble and I try to think of how my actions affect my neighbors, especially those in less privileged circumstances.

I've been a bit disappointed in the MMM community's lack of interest in being a part of the local community.  I get the sense that's it all about looking out for #1, regardless of how it affects others.  That mentality makes me sad.

Do you believe that there is value in having many local shops? Do you enjoy walking through those shops and buying items?

Many of us don't. I see Amazon and others helping to re-invent the modern city. Gas stations become charging stations, retailers (mostly) move online and their ugly buildings disappear. Local shops will succeed by providing a valuable service such as a tasty meal or a haircut. Basic retailers like Walmart really don't add much value,especially if I can get the same products delivered to my door.

Vindicated

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Re: Amazon to Buy Whole Foods
« Reply #9 on: June 16, 2017, 10:25:51 AM »
I know I'm in the minority here, but... Amazon is just like Walmart in their quest to eliminate small businesses and get rid of local jobs.  I think those of us who can afford it should support local businesses and jobs.  I don't live in a bubble and I try to think of how my actions affect my neighbors, especially those in less privileged circumstances.

I've been a bit disappointed in the MMM community's lack of interest in being a part of the local community.  I get the sense that's it all about looking out for #1, regardless of how it affects others.  That mentality makes me sad.

I think we're just admiring a company that is successful.  Also, it's a company many of us own, by way of stock.

This doesn't mean we don't support the community.  I'm sure most of us shop locally in some form.  Doesn't Whole Foods get their produce from the local community?  In a way, Amazon is investing in those communities then.

meadow lark

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Re: Amazon to Buy Whole Foods
« Reply #10 on: June 16, 2017, 10:43:39 AM »
Jane, I guess you can choose to be sad that other people don't value the identical things you do, but making the fact I act differently than you do mean I am selfish and only looking out for myself...  well, Again, that is your choice.
  For me, I separate my charity dollars from my consumption dollars.  Because I have priorities for where my charity dollars go than you do.  For me to buy my food, in my particular location in the desert, without using a chain supermarket,  I would only be able to buy from our co-op, where the prices are higher (usually by a factor of 3) or small ethnic markets with very limited choices.  That may seem reasonable to you, but won't work for me.  I do buy somethings in small markets, but To avoiding the shops I currently use the most (Trader Joe's and Sprouts) I would have to go to a lot of stores every month, and that is not my goal.

Chris22

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Re: Amazon to Buy Whole Foods
« Reply #11 on: June 16, 2017, 10:43:46 AM »
I know I'm in the minority here, but... Amazon is just like Walmart in their quest to eliminate small businesses and get rid of local jobs.

I've long felt that the benefits of shopping at local businesses is overstated.  They're generally less convenient (hours, selection), more expensive, and often not as accommodating as larger companies.  And the whole "watch out for your neighbor" thing, does no one live near people who work at big companies?  Far more of my friends and neighbors work at huge conglomerates than work at local mom and pop shops.  Are these people not deserving of my consideration? 

I patronize small businesses that do a better job (my local dry cleaner is way better than the chains, my local bakery's donuts and cakes blow DD out of the water, local restaurants are way better than chains, etc) but I'm not going to go shop at my local Tru-Value and pay $3 for an electrical outlet when I can buy a case of 10 at Home Depot for $8 (true recent anecdote).   

MMMarbleheader

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Re: Amazon to Buy Whole Foods
« Reply #12 on: June 16, 2017, 10:47:06 AM »
I see amazon as a destroyer of the companies that destroyed local business.

Much like blockbuster killed local video stores and then Netflix came in and killed blockbuster.

I am not going to shed a tear when ugly car centered malls go out of business. I think online shopping and the death of big box stores might help local businesses who provide the service that people once got at the big box stores. 


prognastat

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Re: Amazon to Buy Whole Foods
« Reply #13 on: June 16, 2017, 10:49:38 AM »
I know I'm in the minority here, but... Amazon is just like Walmart in their quest to eliminate small businesses and get rid of local jobs.

I've long felt that the benefits of shopping at local businesses is overstated.  They're generally less convenient (hours, selection), more expensive, and often not as accommodating as larger companies.  And the whole "watch out for your neighbor" thing, does no one live near people who work at big companies?  Far more of my friends and neighbors work at huge conglomerates than work at local mom and pop shops.  Are these people not deserving of my consideration? 

I patronize small businesses that do a better job (my local dry cleaner is way better than the chains, my local bakery's donuts and cakes blow DD out of the water, local restaurants are way better than chains, etc) but I'm not going to go shop at my local Tru-Value and pay $3 for an electrical outlet when I can buy a case of 10 at Home Depot for $8 (true recent anecdote).

This is pretty close to my feelings on it. Advocating for choosing a local business when a non local business is offering a better or better value product to me is simply advocating for inefficiency. Sure there can be problems and those can be resolved, but I disagree they should be resolve by supporting the less efficient option.

sokoloff

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Re: Amazon to Buy Whole Foods
« Reply #14 on: June 16, 2017, 10:58:39 AM »
I've long felt that the benefits of shopping at local businesses is overstated.  They're generally less convenient (hours, selection), more expensive, and often not as accommodating as larger companies.  And the whole "watch out for your neighbor" thing, does no one live near people who work at big companies?  Far more of my friends and neighbors work at huge conglomerates than work at local mom and pop shops.  Are these people not deserving of my consideration? 

I patronize small businesses that do a better job (my local dry cleaner is way better than the chains, my local bakery's donuts and cakes blow DD out of the water, local restaurants are way better than chains, etc) but I'm not going to go shop at my local Tru-Value and pay $3 for an electrical outlet when I can buy a case of 10 at Home Depot for $8 (true recent anecdote).

This is pretty close to my feelings on it. Advocating for choosing a local business when a non local business is offering a better or better value product to me is simply advocating for inefficiency. Sure there can be problems and those can be resolved, but I disagree they should be resolve by supporting the less efficient option.
Totally agree.

We have a great local fishmonger. They're quite expensive, but the fish is amazing and the proprietor very knowledgeable and helpful with advice on fish to select and preparation tips. He earns a lot of our grocery dollars. The other local markets could die in a fire for all I care. High prices, terrible selection, limited hours, inconvenient parking, and (thanks to the wisdom of our city) no grocery bags.

IMO, supporting local jobs when they are less efficient and less competitive is a mix of part job (the portion that would be competitive) and part welfare (the portion that wouldn't). I'd rather cut out the middleman, implement a ~$600/mo UBI, and stop the "support your local jobs" guilt trip.

lbmustache

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Re: Amazon to Buy Whole Foods
« Reply #15 on: June 16, 2017, 11:00:33 AM »
I know I'm in the minority here, but... Amazon is just like Walmart in their quest to eliminate small businesses and get rid of local jobs.

I think we're just admiring a company that is successful.  Also, it's a company many of us own, by way of stock.

This doesn't mean we don't support the community.  I'm sure most of us shop locally in some form.  Doesn't Whole Foods get their produce from the local community?  In a way, Amazon is investing in those communities then.

This is one of my concerns too, although I generally support this move. Whole Foods does work with local retailers, although not everything comes from local businesses. I don't see Amazon getting rid of that IMO... in an ideal world, I see WF keeping the work with local retailers, but local retailers having a larger audience through Amazon's platform (there is only one WF in a 30ish mile radius near me, and many people, including myself, would shop more at WF if it were more accessible. Enter Amazon's quick shipping partnered with WF).

Makes sense to me. This an clear strategy for them to quickly deploy brick and mortar stores.

Whole Food's demographics and locations probably coincides well with savy Amazon prime shoppers.

Yep, totally agree. This was a good move by Amazon in that sense. I wonder what the actual overlap is (I know I myself am one of them)


I know people will lament the small jobs and local businesses. I do not see them getting destroyed completely, but they likely won't grow in scale from where they are at now, unless Amazon or someone else starts making bigger investments. I also agree with the above anecdote about quality/competition. I think Amazon is looking at the future, and with that in mind, this investment makes sense.
« Last Edit: June 16, 2017, 11:02:11 AM by lbmustache »

redbird

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Re: Amazon to Buy Whole Foods
« Reply #16 on: June 16, 2017, 11:03:14 AM »
If Amazon wants to use Whole Foods as a retail launching platform, it's a great start. But there still isn't a Whole Foods everywhere. The closest Whole Foods to me is a 1 hour drive one-way to another city. I'm not driving 2 hours round-trip just to pick up groceries with Amazon Fresh. I do live in a small town now, but even when I lived in a major metro area the closest Whole Foods was (and still is, just checked) a 30 minute drive one-way away.

Travis

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Re: Amazon to Buy Whole Foods
« Reply #17 on: June 16, 2017, 11:06:15 AM »
In a way you're still using Amazon to support small businesses - just not the ones in your area.  Amazon is a middleman for a lot of small retailers and connects you with folks looking to sell a hard to find or used item.  The last several purchases I made through Amazon were fulfilled by companies I never heard of and definitely weren't "bix box corporate", but had what I needed.

prognastat

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Re: Amazon to Buy Whole Foods
« Reply #18 on: June 16, 2017, 11:25:00 AM »
I live in a small town with a Main Street and local businesses. There is no room, thankfully, for a big box store, but Main Street is lined with small local businesses, including restaurants, specialty shops, clothing stores, and a 100-year-old hardware store. None of the buildings are "ugly." The more businesses that set up shop, the less we pay in taxes. This in itself is a huge incentive to patronize them and keep them here. These local businesses also employ a lot of local people, who might not otherwise have access to employment. A food co-op recently opened up here, too. Local people will have access to healthy food at a reasonable price.

I think what all of you who are advocating for "efficiency" are missing is the human part of the equation, interacting with people who have just as much of a vested interest in your town as you do. I do shop at Target, Home Depot, etc., but I also spend my dollars in town. As I said, these dollars ultimately come back to me in the form of taxes that are collected by these local businesses, which go toward improving the town itself. Not only that, but I enjoy interacting with these people. They are always friendly and accommodating, unlike at a big box store where you consider yourself lucky if the employees are merely cordial.

I think what you are missing is that your advocated way of collecting taxes is an inefficient way of collecting these taxes(also those larger business still have to pay taxes on your purchases). However I can guarantee you if the business is not competitive then there is much more loss on the amount you pay on the local stores and how much of that is going towards the taxes, it would effectively be an indirect and more inefficient tax since it has to go through the local stores that also need to make a profit. I'd rather spend less and have all of the money collected through a tax go directly where it needs to rather than argue that instead I should pay far more for a service than the value it offers so some of that can go towards the same causes.

BTDretire

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Re: Amazon to Buy Whole Foods
« Reply #19 on: June 16, 2017, 11:30:02 AM »
I was following other stocks that took a beating because of the news.
Target---https://www.google.com/finance?q=tgt&ei=DxBEWeniNYWUmAHk2rbABw
At one point down over 10%
Sprouts Farmers Market--
https://www.google.com/finance?q=sfm&ei=-RJEWfmxDMK3mAHb0JToAw
At one point down over 15%
They have both recovered some. A couple of guys on the group I monitor bought and sold
in a couple hours for a profit.

 Does anyone have a Sprouts Farmers Market near them? What's it like?
I heard they're stiff competition for Whole Foods.

ketchup

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Re: Amazon to Buy Whole Foods
« Reply #20 on: June 16, 2017, 11:36:57 AM »
Oh wow, that's a ballsy move.

I placed an order with Amazon Fresh for the first time last week, and it was shockingly great.  The delivery was 48 minutes after the window they said (2-4pm meant 4:48pm), but the pricing and quality of produce was fantastic (even stuff like avocados).  Everything was packed extremely well (cold stuff with cooler packs etc.) but there was a lot of packaging waste.

cacaoheart

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Re: Amazon to Buy Whole Foods
« Reply #21 on: June 16, 2017, 11:51:29 AM »
Amazon Fresh is not yet in my area, though I use instacart to shop online from Whole Foods, Food Lion, Harris Teeter, and Costco already. With an infant at home it's been very convenient to be able to pick out groceries from local stores I'm familiar with and have it delivered within an hour or two with not much of a markup in price. I wonder if Whole Foods will still work with instacart, or if only Amazon Fresh will be allowed in the near future.

Chris22

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Re: Amazon to Buy Whole Foods
« Reply #22 on: June 16, 2017, 12:09:01 PM »
We use Peapod, but I always hate waiting around for the groceries.  You have to specify a few days in advance, and a 2hr time window; I don't know where I might be or might want to be from 1-3PM on Sunday on Thursday night.  Lately we've done Peapod pickup instead, and that's way better, because you don't lose the whole window, when you pick up is up to you.  But that's all for the benefit of my wife, I don't mind going to the grocery store.

meadow lark

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Re: Amazon to Buy Whole Foods
« Reply #23 on: June 16, 2017, 12:15:53 PM »
I shop at Sprouts a lot.  I eat a lot of veggies and beans and they have a large selection and the prices are as good or lower than anywhere else in my town.  Similar prices  to Walmart or Costco on produce.  They sell both organic and conventional stuff.  Have a good selection of any dairy-free alternatives I use, and they sell beans, oats and nuts by bulk, which I like b/c I think (for no good reason) that they are fresher.  Wednesday is the best day to go b/c they have all the sales from the week before and the next week still going.  And they do put the bulk nuts and oats on sale.

WSUCoug1994

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Re: Amazon to Buy Whole Foods
« Reply #24 on: June 16, 2017, 12:21:08 PM »
I know I'm in the minority here, but... Amazon is just like Walmart in their quest to eliminate small businesses and get rid of local jobs.  I think those of us who can afford it should support local businesses and jobs.  I don't live in a bubble and I try to think of how my actions affect my neighbors, especially those in less privileged circumstances.

I've been a bit disappointed in the MMM community's lack of interest in being a part of the local community.  I get the sense that's it all about looking out for #1, regardless of how it affects others.  That mentality makes me sad.

More than 60% of Amazon's sales come through 3rd parties - the majority of those being small businesses.

A Definite Beta Guy

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Re: Amazon to Buy Whole Foods
« Reply #25 on: June 16, 2017, 12:41:19 PM »
Stupid as sin, IMO. Whole Foods has suffered a lot recently. They have a lot of activist shareholders looking for major changes because of this. Grocery has become super-competitive, especially in the niche organic sector, especially as commercial real estate looks to grocers to replace traditional anchor retailers.

Expanding into a low-margin business about to become a major price war...wtf?

To me, Amazon is looking to become a major retail conglomerate, but have no clear idea on how to do it. I doubt they'll win long-term against the likes of Wal-Mart.

I've been having an argument with one of my co-workers all day who thinks this is a great move. Neither of us are business experts, obviously, lol.

sokoloff

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Re: Amazon to Buy Whole Foods
« Reply #26 on: June 16, 2017, 12:52:17 PM »
Grocery has become super-competitive, especially in the niche organic sector, especially as commercial real estate looks to grocers to replace traditional anchor retailers.

Expanding into a low-margin business about to become a major price war...wtf?
When was grocery ever NOT a super-competitive business? Margins in grocery are low single digit at best.

Amazon is experienced at high-volume, low net margin business. They're perfectly happy to build for long-term scale and customer satisfaction while taking low (or negative) net margins in the present day. It's not clear that WF was an ideal match, but there's a lot of crossover in customer segment in that typical customers of one are target customers of the other.

sisto

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Re: Amazon to Buy Whole Foods
« Reply #27 on: June 16, 2017, 12:53:24 PM »
I was following other stocks that took a beating because of the news.
Target---https://www.google.com/finance?q=tgt&ei=DxBEWeniNYWUmAHk2rbABw
At one point down over 10%
Sprouts Farmers Market--
https://www.google.com/finance?q=sfm&ei=-RJEWfmxDMK3mAHb0JToAw
At one point down over 15%
They have both recovered some. A couple of guys on the group I monitor bought and sold
in a couple hours for a profit.

 Does anyone have a Sprouts Farmers Market near them? What's it like?
I heard they're stiff competition for Whole Foods.
I have a Sprouts near me and yes I go there rather than Whole Paycheck. They are WAY cheaper and have a great selection of Organics, Non GMO, Grass Fed, Cage Free etc. etc. etc. I very rarely go to Whole Paycheck when I need a specific item that only they carry. I do most shopping at Costco and then supplement that with Sprouts and then will go to some other places for certain sale items that are a good enough deal that they are worth the trip.

A Definite Beta Guy

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Re: Amazon to Buy Whole Foods
« Reply #28 on: June 16, 2017, 01:00:20 PM »
Grocery has become super-competitive, especially in the niche organic sector, especially as commercial real estate looks to grocers to replace traditional anchor retailers.

Expanding into a low-margin business about to become a major price war...wtf?
When was grocery ever NOT a super-competitive business? Margins in grocery are low single digit at best.

Amazon is experienced at high-volume, low net margin business. They're perfectly happy to build for long-term scale and customer satisfaction while taking low (or negative) net margins in the present day. It's not clear that WF was an ideal match, but there's a lot of crossover in customer segment in that typical customers of one are target customers of the other.

Grocery in general has been a low-margin business, but there's been a lot of players with defendable market shares, and Whole Foods had a differentiated product until recently. This is going to change because a lot of grocery retailers are doing big expansions (I suspect many will end in tears).

Discount grocery like Aldi is going to become brutal, too.

This is not an industry I would expand into, were it my money.

anonymouscow

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Re: Amazon to Buy Whole Foods
« Reply #29 on: June 16, 2017, 01:07:47 PM »
I know I'm in the minority here, but... Amazon is just like Walmart in their quest to eliminate small businesses and get rid of local jobs.  I think those of us who can afford it should support local businesses and jobs.  I don't live in a bubble and I try to think of how my actions affect my neighbors, especially those in less privileged circumstances.

I've been a bit disappointed in the MMM community's lack of interest in being a part of the local community.  I get the sense that's it all about looking out for #1, regardless of how it affects others.  That mentality makes me sad.

I think it depends on how you define the local community.

I have seen some small businesses that sell the same Chinese junk as Walmart for twice the price. Or maybe they are selling toothpaste and soap for twice the price. Yeah, you can say at least the profits go to the small business, but at the same time the small business isn't making anything, it's just reselling stuff.

Sure food-wise, you can shop at farmers markets. I am just not so quick to say small business is good because it is small, big is bad because it is big.

ketchup

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Re: Amazon to Buy Whole Foods
« Reply #30 on: June 16, 2017, 02:47:15 PM »
We use Peapod, but I always hate waiting around for the groceries.  You have to specify a few days in advance, and a 2hr time window; I don't know where I might be or might want to be from 1-3PM on Sunday on Thursday night.  Lately we've done Peapod pickup instead, and that's way better, because you don't lose the whole window, when you pick up is up to you.  But that's all for the benefit of my wife, I don't mind going to the grocery store.
With Amazon Fresh I was able to place an order for "2-4pm" at 9am same-day, so that aspect of it was nice.  And I didn't have to be there, they could have just left it (the refrigerated stuff was packed with cooler packs and would have been fine).  Prices were comparable to a decent grocery store (maybe slightly cheaper than Jewel on average), meat marked up a little presumably due to cooler pack overhead.  I hadn't seen any delivery services for groceries that were at all price-competitive before.

honeybbq

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Re: Amazon to Buy Whole Foods
« Reply #31 on: June 16, 2017, 03:21:17 PM »
I've long felt that the benefits of shopping at local businesses is overstated.  They're generally less convenient (hours, selection), more expensive, and often not as accommodating as larger companies.  And the whole "watch out for your neighbor" thing, does no one live near people who work at big companies?  Far more of my friends and neighbors work at huge conglomerates than work at local mom and pop shops.  Are these people not deserving of my consideration? 

I patronize small businesses that do a better job (my local dry cleaner is way better than the chains, my local bakery's donuts and cakes blow DD out of the water, local restaurants are way better than chains, etc) but I'm not going to go shop at my local Tru-Value and pay $3 for an electrical outlet when I can buy a case of 10 at Home Depot for $8 (true recent anecdote).

This is pretty close to my feelings on it. Advocating for choosing a local business when a non local business is offering a better or better value product to me is simply advocating for inefficiency. Sure there can be problems and those can be resolved, but I disagree they should be resolve by supporting the less efficient option.
Totally agree.

We have a great local fishmonger. They're quite expensive, but the fish is amazing and the proprietor very knowledgeable and helpful with advice on fish to select and preparation tips. He earns a lot of our grocery dollars. The other local markets could die in a fire for all I care. High prices, terrible selection, limited hours, inconvenient parking, and (thanks to the wisdom of our city) no grocery bags.

IMO, supporting local jobs when they are less efficient and less competitive is a mix of part job (the portion that would be competitive) and part welfare (the portion that wouldn't). I'd rather cut out the middleman, implement a ~$600/mo UBI, and stop the "support your local jobs" guilt trip.

I haven't made it thru all the comments, but at least in Seattle, there is Amazon fresh with a subcategory of local. We can buy fish from the pike place market, or a local yogurt maker (delicious!). While I can't speak to all locations, at least here they incorporate local specialty food providers and restaurants.

lbmustache

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Re: Amazon to Buy Whole Foods
« Reply #32 on: June 16, 2017, 04:32:45 PM »


 Does anyone have a Sprouts Farmers Market near them? What's it like?
I heard they're stiff competition for Whole Foods.

IMO, Sprouts is better price-wise, but has a smaller selection. I also think it has a different image than WF, so thus attracts a different buyer, although there is some overlap. In the world of bougie grocery shopping I think it's something like Gelson's > Whole Foods > Spouts/Trader Joe's (tied).

Pigeon

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Re: Amazon to Buy Whole Foods
« Reply #33 on: June 16, 2017, 09:01:14 PM »
I know I'm in the minority here, but... Amazon is just like Walmart in their quest to eliminate small businesses and get rid of local jobs.  I think those of us who can afford it should support local businesses and jobs.  I don't live in a bubble and I try to think of how my actions affect my neighbors, especially those in less privileged circumstances.

I've been a bit disappointed in the MMM community's lack of interest in being a part of the local community.  I get the sense that's it all about looking out for #1, regardless of how it affects others.  That mentality makes me sad.

+1 Especially with regard to getting rid of local jobs.
I very much dislike their employment practices as well.

Noodle

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Re: Amazon to Buy Whole Foods
« Reply #34 on: June 16, 2017, 10:52:39 PM »
I am also very curious to see what they do with it. Will they keep it mostly as is, but use the infrastructure to build out the delivery segment, or will they get more radical, as with their Seattle grocery store with no check-out lane. Whole Foods is just a block or so from me, but I really only go there a) to get really obscure ingredients the regular grocery store doesn't carry, b) when I forget one key ingredient for the week's menu, but don't feel like getting the car back out to go back to the store, or c) as a very rare treat, the prepared-food bar. I would personally love it if they made it a more useful grocery for me (ie, not insanely overpriced) but I do feel bad for the employees. Whole Foods is a famously good employer, and apparently Amazon is...not. They must be feeling pretty nervous.

triangle

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Re: Amazon to Buy Whole Foods
« Reply #35 on: June 17, 2017, 03:40:49 AM »
I think it is a bad move by Amazon. So I applaud their decision to buy Whole Foods.

I still purchase from Amazon, in fact I made a purchase 2 days ago, but I have greatly dialed back my Amazon purchases once I realized they are essentially a non-profit that is destroying retail shops and funneling their profits into AWS and other endeavors which in total have a negative effect on my Index Fund investments.

Meaning as a consumer who is also an Index investor and looking for early retirement, why would I voluntarily buy goods from the "non-profit" Amazon which I could buy at the same price from various other places which are making a profit and paying a small dividend. Once I realized this I cut back on my Amazon shopping.

sokoloff

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Re: Amazon to Buy Whole Foods
« Reply #36 on: June 17, 2017, 04:21:15 AM »
I still purchase from Amazon, in fact I made a purchase 2 days ago, but I have greatly dialed back my Amazon purchases once I realized they are essentially a non-profit that is destroying retail shops and funneling their profits into AWS and other endeavors which in total have a negative effect on my Index Fund investments.
You have that wrong, exactly backwards in fact. AWS is the largest source of profit for Amazon.

From the analysis of their most recent earnings report:
However, on the same day that two of those rivals also released earnings, Amazon showed why AWS is the most valuable startup in tech. The company reported quarterly AWS revenue of $3.66 billion, slightly topping estimates and reflecting 42.6% growth, and operating income of $890 million. That net profit margin of more than 24% was actually higher than the year-ago quarter, wiping away more fears.

Amazon’s total operating income for the quarter was $1.01 billion. While it doesn’t take a math wizard to see that Amazon would not be anywhere near as profitable without AWS, here is the figure: AWS accounted for about 89% of Amazon’s total operating income for the quarter, with the rest attributable to e-commerce.
« Last Edit: June 17, 2017, 04:26:15 AM by sokoloff »

GreenSheep

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Re: Amazon to Buy Whole Foods
« Reply #37 on: June 17, 2017, 08:21:40 AM »
Does anyone have a Sprouts Farmers Market near them? What's it like?
I heard they're stiff competition for Whole Foods.

I LOVE Sprouts. We have a Sprouts and a Whole Foods nearby, equidistant from our house. I always choose Sprouts because their prices are so much better. I mean, really, pineapples were 88 cents each (each! not per pound!) last week. I once dated an attorney who said that the owner of Sprouts was one of his clients, and he told him they make most of their money on the vitamins/supplements, not on the food... so the food prices are good.

There is a Trader Joe's next to WF, and I have never seen the appeal of Trader Joe's unless you're really into their premade meals, which I'm not. I love to cook.

Sprouts has a huge variety of fresh produce, both organic and conventional, and there's always something good on sale. Their bulk foods are also well-priced. The only time I go to WF is when Sprouts is out of something, which has happened maybe 1-2 times in the past year, or when they don't have something really weird that WF does have (whole wheat phyllo dough was the most recent thing). I do choose Amazon over all of these places for some bulk goods due to better prices on Amazon (cacao powder, some spices, etc. -- although ethnic stores are really best for most spices).

After we move in a couple of weeks, we'll be stuck with just a Safeway and a local co-op which doesn't look all that impressive. So I'm very sad to be leaving my Sprouts! I'm kind of glad there isn't a Whole Foods, though, so I won't be tempted to shop there instead. I think there will be a lot more Amazon purchases of dry goods in our future!

maizefolk

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Re: Amazon to Buy Whole Foods
« Reply #38 on: June 17, 2017, 09:33:05 AM »
Amazon was already moving into the grocery retail space, so debating whether or not it is the right line of business to get into is a separate debate. Since they'd already decided to make that move, buying a pre-existing chain that is making (some) money on a bunch of locations across the US makes sense.

A lot of the interesting stuff amazon wants to do (replacing cashiers with computer vision that watches what you put in your cart) costs a lot to develop, but has a relatively low marginal cost to deploy to additional stores once they already know how to make it work. AmazonFresh had something like 10 locations 9 years after it first launched, and their grocery retail experiment was operating at only one location. Setting up new grocery stores from scratch is expensive and slow and there is no guarantee a new location ever makes a profit, so it would have been hard to quickly scale stuff like the cashier-free stores to enough locations to cover the R&D cost spent on developing it. Picking up a 400+ store footprint in one fell swoop makes it much easier to make those numbers work.

I'm fascinated to see how this works out, and for the first time since I moved to my present location I am happy that I live within easy driving distance of a Whole Foods.

aspiringnomad

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Re: Amazon to Buy Whole Foods
« Reply #39 on: June 17, 2017, 10:07:09 AM »
Grocery has become super-competitive, especially in the niche organic sector, especially as commercial real estate looks to grocers to replace traditional anchor retailers.

Expanding into a low-margin business about to become a major price war...wtf?
When was grocery ever NOT a super-competitive business? Margins in grocery are low single digit at best.

Amazon is experienced at high-volume, low net margin business. They're perfectly happy to build for long-term scale and customer satisfaction while taking low (or negative) net margins in the present day. It's not clear that WF was an ideal match, but there's a lot of crossover in customer segment in that typical customers of one are target customers of the other.

Grocery in general has been a low-margin business, but there's been a lot of players with defendable market shares, and Whole Foods had a differentiated product until recently. This is going to change because a lot of grocery retailers are doing big expansions (I suspect many will end in tears).

Discount grocery like Aldi is going to become brutal, too.

This is not an industry I would expand into, were it my money.

European grocer (and Aldi competitor) Lidl just set up a North American headquarters in advance of opening its first store with plans to open 100 by this time next year and potentially 2,000 US stores at full scale. Whole Foods already has 9 stores existing or under construction in my geographically small city and has seemingly sought to grow revenues through aggressive expansion in certain markets.

I agree that the grocery boom were in the midst of, while great for consumers, is going to end in tears for many grocers. Amazon's acquisition of Whole Foods throws another interesting twist into the mix.

aceyou

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Re: Amazon to Buy Whole Foods
« Reply #40 on: June 17, 2017, 11:11:45 AM »
I know I'm in the minority here, but... Amazon is just like Walmart in their quest to eliminate small businesses and get rid of local jobs.  I think those of us who can afford it should support local businesses and jobs.  I don't live in a bubble and I try to think of how my actions affect my neighbors, especially those in less privileged circumstances.

I've been a bit disappointed in the MMM community's lack of interest in being a part of the local community.  I get the sense that's it all about looking out for #1, regardless of how it affects others.  That mentality makes me sad.

My brother and my sister-in-law grow tart cherries and cell tart cherry concentrate on Amazon and are doing pretty well with it.  They would never even make it into a local grocery chain...they are too small.  But they are smart, ambitious, and have a healthy and high quality product.  Amazon makes it possible for them to compete with Walmart, Meijer, etc in their own tiny way.  Thanks Amazon for supporting small local entrepreneurs!!! 

That said, the story of the next century will, as you point out, see an enormous loss of total jobs due to automation, and Amazon is definitely a part of this.  This will be terrible if we keep our current structure of taxation and wealth distribution.  It could result in an amazingly better society if we get creative with things like UBI, universal health care, etc.  But the fact remains that in 30 years we will likely have 8-9 billion people on this rock of ours, and it will likely only take 5-6 billion of us to create all the stuff that we all need.  Instead of trying to hang onto jobs that no longer make sense, I'd strongly advocate that we restructure the way we redistribute wealth. 

In this way, I don't feel like MMM'ers are uninterested in the local community and the people we share this world with.  Many of us just have a very different view of what a positive future will look like.  I would love to see things like Amazon create the need for less human-power to do boring jobs that probably aren't that fulfilling for the people who do them...this does not mean I'm just looking out for #1.  Quite the opposite.  We can produce goods/services far more efficiently, and distribute the wealth far more fairly in ways that gives more dignity to each person and treats our planet's resources more sustainably.   

maizefolk

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Re: Amazon to Buy Whole Foods
« Reply #41 on: June 17, 2017, 11:15:50 AM »
In this way, I don't feel like MMM'ers are uninterested in the local community and the people we share this world with.  Many of us just have a very different view of what a positive future will look like.  I would love to see things like Amazon create the need for less human-power to do boring jobs that probably aren't that fulfilling for the people who do them...this does not mean I'm just looking out for #1.  Quite the opposite.  We can produce goods/services far more efficiently, and distribute the wealth far more fairly in ways that gives more dignity to each person and treats our planet's resources more sustainably.

Thanks for saying this so eloquently aceyou. +1 to all of it.

scottnews

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Re: Amazon to Buy Whole Foods
« Reply #42 on: June 17, 2017, 05:39:00 PM »
This is probably the first step for broadening Amazon Go.    Has anyone used this?

Its retail without any checkout, cashiers or self checkout.  It tracks your purchases through a combination of RFID chip and camera technology.  It then charges your phone or whatever when you leave.

https://www.youtube.com/watch?v=NrmMk1Myrxc

Cadman

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Re: Amazon to Buy Whole Foods
« Reply #43 on: June 17, 2017, 07:19:44 PM »
This will be quite interesting to follow...Grocery shopping is the one thing I enjoy doing in a physical store. I may go in with a list of required staples, but I also like to see what's on sale at the meat counter, look over new products, get ideas for future meals, and see what the competitor match items are this week or what's heavily discounted as the expiration date approaches.

Having a couple different chain stores in the area, they are always trying to out-do each other with pricing, fuel discounts, etc. Perhaps the WF angle is protection against these types of weekly loss-leaders.

BTDretire

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Re: Amazon to Buy Whole Foods
« Reply #44 on: June 18, 2017, 07:54:03 AM »
I was following other stocks that took a beating because of the news.
Target---https://www.google.com/finance?q=tgt&ei=DxBEWeniNYWUmAHk2rbABw
At one point down over 10%
Sprouts Farmers Market--
https://www.google.com/finance?q=sfm&ei=-RJEWfmxDMK3mAHb0JToAw
At one point down over 15%
They have both recovered some. A couple of guys on the group I monitor bought and sold
in a couple hours for a profit.

 Does anyone have a Sprouts Farmers Market near them? What's it like?
I heard they're stiff competition for Whole Foods.
I have a Sprouts near me and yes I go there rather than Whole Paycheck. They are WAY cheaper and have a great selection of Organics, Non GMO, Grass Fed, Cage Free etc. etc. etc. I very rarely go to Whole Paycheck when I need a specific item that only they carry. I do most shopping at Costco and then supplement that with Sprouts and then will go to some other places for certain sale items that are a good enough deal that they are worth the trip.
  I read one story of a Sprouts opening near a Whole Foods and the Whole Foods end up closing.

twbird18

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Re: Amazon to Buy Whole Foods
« Reply #45 on: June 18, 2017, 09:58:14 AM »
Grocery has become super-competitive, especially in the niche organic sector, especially as commercial real estate looks to grocers to replace traditional anchor retailers.

Expanding into a low-margin business about to become a major price war...wtf?
When was grocery ever NOT a super-competitive business? Margins in grocery are low single digit at best.

Amazon is experienced at high-volume, low net margin business. They're perfectly happy to build for long-term scale and customer satisfaction while taking low (or negative) net margins in the present day. It's not clear that WF was an ideal match, but there's a lot of crossover in customer segment in that typical customers of one are target customers of the other.

Grocery in general has been a low-margin business, but there's been a lot of players with defendable market shares, and Whole Foods had a differentiated product until recently. This is going to change because a lot of grocery retailers are doing big expansions (I suspect many will end in tears).

Discount grocery like Aldi is going to become brutal, too.

This is not an industry I would expand into, were it my money.

European grocer (and Aldi competitor) Lidl just set up a North American headquarters in advance of opening its first store with plans to open 100 by this time next year and potentially 2,000 US stores at full scale. Whole Foods already has 9 stores existing or under construction in my geographically small city and has seemingly sought to grow revenues through aggressive expansion in certain markets.

I agree that the grocery boom were in the midst of, while great for consumers, is going to end in tears for many grocers. Amazon's acquisition of Whole Foods throws another interesting twist into the mix.

Lidl has already opened their first stores here - the stores in VA Beach & Hampton, VA opened last week. Some of my family members attempted to go to the grand opening for the deals, but they said there was no parking & a line around the building to enter...

mm1970

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Re: Amazon to Buy Whole Foods
« Reply #46 on: June 18, 2017, 12:05:36 PM »
I know I'm in the minority here, but... Amazon is just like Walmart in their quest to eliminate small businesses and get rid of local jobs.  I think those of us who can afford it should support local businesses and jobs.  I don't live in a bubble and I try to think of how my actions affect my neighbors, especially those in less privileged circumstances.

I've been a bit disappointed in the MMM community's lack of interest in being a part of the local community.  I get the sense that's it all about looking out for #1, regardless of how it affects others.  That mentality makes me sad.

Do you believe that there is value in having many local shops? Do you enjoy walking through those shops and buying items?

Many of us don't. I see Amazon and others helping to re-invent the modern city. Gas stations become charging stations, retailers (mostly) move online and their ugly buildings disappear. Local shops will succeed by providing a valuable service such as a tasty meal or a haircut. Basic retailers like Walmart really don't add much value,especially if I can get the same products delivered to my door.

I don't think of it as either/ or.  I got into a bit of an argument on the MMM facebook page about the t-shirts.  With a guy who thinks buying a $16 t-shirt is anti-mustachian.  I pointed out that it's not if you need a t-shirt?  "But the mustachian thing to do is buy a $5 shirt!"  Um...not if you want one not made by children in a 3rd world sweatshop.

So.  I think of it from both sides.  On one hand, I like to support local business.  Local businesses provide jobs.  They add to the community.  They donate to our local schools.  On the other hand, I am frugal.  I have friends who buy  mostly local food - from the farmer's market, including meats and eggs and milk.  And their annual grocery budget is close to $24,000.  That's too much for me.  I know other people, though maybe not locally, who keep their grocery budget super low, by buying whatever is cheapest, no matter where it comes from.

I do a combo:
- I have a weekly veggie box.  It comes from local farmers, but is provided/gathered by a local company.  Yes, I'm spending extra to have it boxed and delivered.  But they are flexible and save me time.  Also, it's not too much more expensive than if I went to the farmer's market myself, because they get bulk discounts that I would not get.  Still, if I were to buy the same kinds of produce at the cheapest bargain stores, I could get the produce for $20 instead of $40 (it will not be close to the same quality). On the other hand, the box does not provide the total amount of produce that we eat.  It is about 2/3 of our produce for the week.  So, the other 1/3 I buy discount - 99 cent store, Costco, Trader Joe's.

- We eat out very rarely.  But when we do I tend to choose local restaurants instead of chains.  The pizza place that donates to our school.  The smoothie place that did a fundraiser with us.

- I hate shopping.  I love Amazon.  What do I buy on Amazon?  Diapers/ pull-ups (almost done with those), powdered peanut butter.  Toys.  The occasional kid's item.  I like supporting local stores.  I run a lot.  I buy running shoes at the local running store, but man they are $160 a pair.  So I buy 2 pairs a year.  First pair, running store.  Second pair, on-line, last year's model, for $40 less.

- Wine (and occasional beer).  We live in wine country.  Yes, I can go to Trader Joe's and buy a good bottle of wine for $7, (and I do), but MOST of the wine I buy is from a local winery or wineries.

- Books.  Mostly I get books from our little free libraries or Amazon.  But we have one really awesome local independent bookstore, and I pretty much buy a gift certificate from there for every kid birthday party I go to.  They also do fundraising nights for all of the elementary schools.

There are a few other places that I'd like to support, but don't often.  We prefer to bake our own cakes for birthdays, but sometimes will get cupcakes from the local bakery. 

mm1970

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Re: Amazon to Buy Whole Foods
« Reply #47 on: June 18, 2017, 12:08:22 PM »
I was following other stocks that took a beating because of the news.
Target---https://www.google.com/finance?q=tgt&ei=DxBEWeniNYWUmAHk2rbABw
At one point down over 10%
Sprouts Farmers Market--
https://www.google.com/finance?q=sfm&ei=-RJEWfmxDMK3mAHb0JToAw
At one point down over 15%
They have both recovered some. A couple of guys on the group I monitor bought and sold
in a couple hours for a profit.

 Does anyone have a Sprouts Farmers Market near them? What's it like?
I heard they're stiff competition for Whole Foods.

We *finally* got a Sprouts.  I love it.  Their sales are really really good.  Far more affordable than Whole Foods.  When I go to WF, I cannot fight the lure of the hot bar, and my bill goes to $30 easy.

BTDretire

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Re: Amazon to Buy Whole Foods
« Reply #48 on: June 18, 2017, 05:35:49 PM »
I was following other stocks that took a beating because of the news.
Target---https://www.google.com/finance?q=tgt&ei=DxBEWeniNYWUmAHk2rbABw
At one point down over 10%
Sprouts Farmers Market--
https://www.google.com/finance?q=sfm&ei=-RJEWfmxDMK3mAHb0JToAw
At one point down over 15%
They have both recovered some. A couple of guys on the group I monitor bought and sold
in a couple hours for a profit.

 Does anyone have a Sprouts Farmers Market near them? What's it like?
I heard they're stiff competition for Whole Foods.

We *finally* got a Sprouts.  I love it.  Their sales are really really good.  Far more affordable than Whole Foods.  When I go to WF, I cannot fight the lure of the hot bar, and my bill goes to $30 easy.
Don't know how many here listen to Bob Brinker, He's a big Vanguard funds guy, but he mentioned Sprouts and how well it is doing on his program today. I never heard of Sprouts until Friday and now I have references coming from all over.

aspiringnomad

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Re: Amazon to Buy Whole Foods
« Reply #49 on: June 18, 2017, 11:10:42 PM »
Grocery has become super-competitive, especially in the niche organic sector, especially as commercial real estate looks to grocers to replace traditional anchor retailers.

Expanding into a low-margin business about to become a major price war...wtf?
When was grocery ever NOT a super-competitive business? Margins in grocery are low single digit at best.

Amazon is experienced at high-volume, low net margin business. They're perfectly happy to build for long-term scale and customer satisfaction while taking low (or negative) net margins in the present day. It's not clear that WF was an ideal match, but there's a lot of crossover in customer segment in that typical customers of one are target customers of the other.

Grocery in general has been a low-margin business, but there's been a lot of players with defendable market shares, and Whole Foods had a differentiated product until recently. This is going to change because a lot of grocery retailers are doing big expansions (I suspect many will end in tears).

Discount grocery like Aldi is going to become brutal, too.

This is not an industry I would expand into, were it my money.

European grocer (and Aldi competitor) Lidl just set up a North American headquarters in advance of opening its first store with plans to open 100 by this time next year and potentially 2,000 US stores at full scale. Whole Foods already has 9 stores existing or under construction in my geographically small city and has seemingly sought to grow revenues through aggressive expansion in certain markets.

I agree that the grocery boom were in the midst of, while great for consumers, is going to end in tears for many grocers. Amazon's acquisition of Whole Foods throws another interesting twist into the mix.

Lidl has already opened their first stores here - the stores in VA Beach & Hampton, VA opened last week. Some of my family members attempted to go to the grand opening for the deals, but they said there was no parking & a line around the building to enter...

Wow, I hadn't realized the first stores are already open. I shopped at a few in Europe and wasn't very impressed with the freshness or quality of the fruits and veggies, but apparently they're aiming for higher quality with their US expansion...they'll need to if they want to compete in this crowded marketplace.