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Old 06-17-2017, 07:34 PM   #26
gangip
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Re: Amazon Buying Whole Foods

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because the process to eliminate the competition will be favorable to consumers, but once they have decimated the competition the situation would be very bad for consumers re: monopoly
Are monopolies always bad for consumers? Is it possible that it might not be so bad if a company that puts out a high quality product has a monopoly on a certain market? (Imagine, for instance, how cool it would be if Google Fiber had a monopoly on internet in the US and some places wouldn't be pigeon holed into having to buy through Comcast. This might be a weak example but I think you see my point.)

Or is there a phenomenon that any company capable of obtaining a monopoly must also be fuelled by a certain amount of selfish ambition and therefore consumers are doomed to being exploited? I'm guessing there's a lot of ways too look at it and eventually there will be some natural equilibrium between all the forces but I'm wondering what BFIers who are smarter than me think.
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Old 06-18-2017, 02:25 AM   #27
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Re: Amazon Buying Whole Foods

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Posted this months ago, but this is what it's all about. Coming to a Whole Foods near you.

I disagree that Amazon Go is the motivating factor behind the acquisition, although I believe you'll see the first public rollouts/beta of Go happen as part of a Whole Foods concept store. So WF is a nice complement in that respect.

Go is a retail licensing play for Amazon that spans far beyond grocery. I'd look to see Amazon prove out the tech in WF and then look to license.

Ultimately WF acquisition has more to do with online grocery and logistics than anything else.
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Old 06-18-2017, 08:37 AM   #28
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Re: Amazon Buying Whole Foods

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Are monopolies always bad for consumers? Is it possible that it might not be so bad if a company that puts out a high quality product has a monopoly on a certain market? (Imagine, for instance, how cool it would be if Google Fiber had a monopoly on internet in the US and some places wouldn't be pigeon holed into having to buy through Comcast. This might be a weak example but I think you see my point.)
Monopolies aren't always bad, it depends on if it's a natural monopoly (which never exist for very long), or if it's a government enforced artificial monopoly (which can exist for a very long time).

Standard Oil is a good example. They developed a near natural monopoly by being innovative and being efficient. Customers got lower prices and freed up a lot of their budget for non-energy consumption. Win-win situation.

However once they reached the pinnacle of their industry, they started using the government to suppress competition to artificially perpetuate their monopoly - obviously a raw deal for consumers.
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Old 06-18-2017, 08:51 AM   #29
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Re: Amazon Buying Whole Foods

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Are monopolies always bad for consumers? Is it possible that it might not be so bad if a company that puts out a high quality product has a monopoly on a certain market? (Imagine, for instance, how cool it would be if Google Fiber had a monopoly on internet in the US and some places wouldn't be pigeon holed into having to buy through Comcast. This might be a weak example but I think you see my point.)

Or is there a phenomenon that any company capable of obtaining a monopoly must also be fuelled by a certain amount of selfish ambition and therefore consumers are doomed to being exploited? I'm guessing there's a lot of ways too look at it and eventually there will be some natural equilibrium between all the forces but I'm wondering what BFIers who are smarter than me think.
so comcast has a monopoly in certain regions and as you point out it sucks. they dont invest in their network and customer service because they dont have to. Google fiber co existing makes them invest and is good for consumers. but if it was just google fiber and no one else it would go back to being ****.
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Old 06-18-2017, 08:54 AM   #30
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Re: Amazon Buying Whole Foods

also there are 3.5mm cashiers in the states.

https://www.bls.gov/oes/current/oes412011.htm

good luck to them in the next 10 years. as video above shows amazon clearly wants to cut that expense and now has 450 store footprint to prove it out.

I know innovation is good and productivity ect. but when millions get fired and the wealth accumulates to 2% of the population who control the IP thats a problem. Bill gates recently said we need to start taxing the robots an income tax. hes right
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Old 06-18-2017, 09:14 AM   #31
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Re: Amazon Buying Whole Foods

That 3.5mm number isn't really telling the whole story though. There must be hundreds of thousands of current cashiers who are high school and college students who will move on to other jobs. They're not going to be losing their "career" once it's automated. Also, southern states where labour is cheaper will most likely be very slow to adapt new tech, my prediction is that there will still be millions of cashiers in 2030.

I'm still not buying into the post-scarcity automated robotic, jobless society. Thousands of occupations in the past have become obsolete. However, market economies are a "lattice-work", people find other stuff to do.
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Old 06-18-2017, 10:47 AM   #32
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Re: Amazon Buying Whole Foods

I don't see how Amazon go is any better than the same club app where u scan your items witb your phone and show your receipt as u walk out
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Old 06-18-2017, 11:04 AM   #33
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Re: Amazon Buying Whole Foods

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I disagree that Amazon Go is the motivating factor behind the acquisition, although I believe you'll see the first public rollouts/beta of Go happen as part of a Whole Foods concept store. So WF is a nice complement in that respect.

Go is a retail licensing play for Amazon that spans far beyond grocery. I'd look to see Amazon prove out the tech in WF and then look to license.

Ultimately WF acquisition has more to do with online grocery and logistics than anything else.
Interesting idea, but why would they cut their own throat? This is a major competitive advantage for them on which they're years ahead. Shopping without checkouts is solid gold - minutes saved for every shopper. Lower costs and hence prices. Licensing their tech makes no sense - they won't get much money for it, and they give away their competitive advantage for the store chain they just bought (not to mention, the lower costs that no checkouts provide to whoever they license it to, will create stronger competition against their online grocery/Amazon fresh deliveries). It would be an insanely stupid thing to do.
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Old 06-18-2017, 11:32 AM   #34
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Re: Amazon Buying Whole Foods

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Interesting idea, but why would they cut their own throat? This is a major competitive advantage for them on which they're years ahead. Shopping without checkouts is solid gold - minutes saved for every shopper. Lower costs and hence prices. Licensing their tech makes no sense - they won't get much money for it, and they give away their competitive advantage for the store chain they just bought (not to mention, the lower costs that no checkouts provide to whoever they license it to, will create stronger competition against their online grocery/Amazon fresh deliveries). It would be an insanely stupid thing to do.
Most stores already have this tech. You can use a personal scanner and buy the items as you shop without having to checkout in line.

Amazon Go looks like an interesting business model for them to crush convenience stores. Since the teaser video only shows singles and couples shopping, I'm assuming it's not meant for big stores with diverse consumers (parents toting kids)...

Amazon and Walmart are both digital flea markets and both are trying to become more luxurious. Amazon bought Whole Foods because of Walmart. Jet+Walmart = Amazon losing market share. Walmart has started buying up "premium" brands to re-position itself, and its been working. I'm surprised Walmart didn't acquire Whole Foods first.
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Old 06-18-2017, 11:41 AM   #35
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Re: Amazon Buying Whole Foods

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I don't see how Amazon go is any better than the same club app where u scan your items witb your phone and show your receipt as u walk out
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Most stores already have this tech. You can use a personal scanner and buy the items as you shop without having to checkout in line.
These comments are amazing to me. Self scanning isn't close to pick up and go. They don't have this tech at all. They have "be you own checkout assistant and pay us the same amount of money", which is a bug, not a feature.

Not to mention, even with that, most people use checkouts as they don't like the self scanning. Simply picking up what you want and leaving is miles ahead of anything you guys mention, from checkout to self scanning to self checkout. This is miles ahead. How do you not see how revolutionary this is?? There is nothing like it.

I guess as poker players/self employed with time on our hands, most of us don't have any idea about how many people desire an as easy as possible shopping experience.
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Amazon and Walmart are both digital flea markets and both are trying to become more luxurious. Amazon bought Whole Foods because of Walmart. Jet+Walmart = Amazon losing market share. Walmart has started buying up "premium" brands to re-position itself, and its been working. I'm surprised Walmart didn't acquire Whole Foods first.
It would be nice to see more robust analysis of why Amazon did this. To me it seems like a natural extension of Go - why would spend tons of money developing it to never use? - but perhaps others have compelling ideas.

If Amazon meant to compete with low cost/wanted a local distribution chain, there are way better buys that Whole Foods. The only way this makes sense to me is as a premium shopping experience with Go.
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Old 06-18-2017, 12:00 PM   #36
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Re: Amazon Buying Whole Foods

Go very much seems to be intended for urban shoppers who have smaller baskets.

Amazon's issue with grocery has been "the last mile" - getting fresh produce quickly in the hands of customers. WFM gives them that distribution capability.

I'm thinking this helps resurrect WFM in two other ways - certainly more buying power to potentially lower costs, both for themselves and customers, and with grocery being such a low margin business, they now have the tech advantage as the competition doesn't have the financial resources to keep up with Amazon.
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Old 06-18-2017, 01:33 PM   #37
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Re: Amazon Buying Whole Foods

AMZN is great. But they will never be a super high margin business because of monopoly.

Suppliers are aware of what is going on. It is too easy for them to just slap up a site and sell their **** themselves.

AMZN's economies of scale are in shipping and storage. The huge storage isn't needed if its a distributed as opposed to centralized model like above.

So their margins will be capped by the little guy's shipping cost.
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Old 06-18-2017, 01:35 PM   #38
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Re: Amazon Buying Whole Foods

There is a reason that AAPL doesn't let AMZN sell their new products in bulk (if at all?).

Now if AMZN innovates in the shipping arena...things will start to get interesting.
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Old 06-18-2017, 03:01 PM   #39
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Re: Amazon Buying Whole Foods

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These comments are amazing to me. Self scanning isn't close to pick up and go. They don't have this tech at all. They have "be you own checkout assistant and pay us the same amount of money", which is a bug, not a feature.

Not to mention, even with that, most people use checkouts as they don't like the self scanning. Simply picking up what you want and leaving is miles ahead of anything you guys mention, from checkout to self scanning to self checkout. This is miles ahead. How do you not see how revolutionary this is?? There is nothing like it.

I guess as poker players/self employed with time on our hands, most of us don't have any idea about how many people desire an as easy as possible shopping experience.

It would be nice to see more robust analysis of why Amazon did this. To me it seems like a natural extension of Go - why would spend tons of money developing it to never use? - but perhaps others have compelling ideas.

If Amazon meant to compete with low cost/wanted a local distribution chain, there are way better buys that Whole Foods. The only way this makes sense to me is as a premium shopping experience with Go.
IMO it has nothing to do with GO, which is clearly positioned to be a convenience store technology. Walmart already has 3500 super stores with fresh groceries at low low prices. 90% of Americans are within 10 miles of a Walmart, and their ecommerce business is up over 60% yoy. They haven't even hit critical mass with jet, which is primed to be the major Amazon competitor (No subscription necessary for fast free shipping). The guy running the ecommerce show for Walmart is a former Bezos disciple.

Amazon Fresh had no retail stores before, and now has over 500 locations in area's with a high concentration of wealthy consumers. 60% of households have a prime membership, and a majority of prime members are wealthy people. The logistics of operating a net-order fresh food enterprise rely on having the shortest distance between the product and the customer. Everything Amazon does lowers costs and widens its market reach.
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Old 06-18-2017, 03:36 PM   #40
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Re: Amazon Buying Whole Foods

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Amazon's issue with grocery has been "the last mile" - getting fresh produce quickly in the hands of customers. WFM gives them that distribution capability.

I'm thinking this helps resurrect WFM in two other ways - certainly more buying power to potentially lower costs, both for themselves and customers, and with grocery being such a low margin business, they now have the tech advantage as the competition doesn't have the financial resources to keep up with Amazon.
Quote:
IMO it has nothing to do with GO, which is clearly positioned to be a convenience store technology. Walmart already has 3500 super stores with fresh groceries at low low prices. 90% of Americans are within 10 miles of a Walmart, and their ecommerce business is up over 60% yoy. They haven't even hit critical mass with jet, which is primed to be the major Amazon competitor (No subscription necessary for fast free shipping). The guy running the ecommerce show for Walmart is a former Bezos disciple.

Amazon Fresh had no retail stores before, and now has over 500 locations in area's with a high concentration of wealthy consumers. 60% of households have a prime membership, and a majority of prime members are wealthy people. The logistics of operating a net-order fresh food enterprise rely on having the shortest distance between the product and the customer. Everything Amazon does lowers costs and widens its market reach.
I'm just not seeing it. Whole Foods is the worst possible buy if this is their core goal. Revenue is 15 billion and not growing. They have a mere 500 stores. None of these are set up for Amazon distribution centers. Nor do they have great reach.

Why not buy something like Kroger/City Market if what you guys say is true? Compare Kroger ($18 billion market cap) with Whole Foods (they paid $13 billion):
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The Kroger Co. (Kroger) manufactures and processes food for sale in its supermarkets. The Company operates supermarkets, multi-department stores, jewelry stores and convenience stores throughout the United States. As of January 28, 2017, it had operated approximately 4,000 owned or leased supermarkets, convenience stores, fine jewelry stores, distribution warehouses and food production plants through divisions, subsidiaries or affiliates. These facilities are located throughout the United States. As of January 28, 2017, Kroger operated, either directly or through its subsidiaries, 2,796 supermarkets under a range of local banner names, of which 2,255 had pharmacies and 1,445 had fuel centers. As of January 28, 2017, the Company offered ClickList and Harris Teeter ExpressLane, personalized, order online, pick up at the store services at 637 of its supermarkets. P$$T, Check This Out and Heritage Farm are the three brands. Its other brands include Simple Truth and Simple Truth Organic.
Manufacturing and processing operations, far greater distribution chains, far greater storage facilities and non-prime real estate for expansion, fingers in MANY pies as opposed to just expensive groceries, nearly 6x the number of supermarkets (and larger and lower cost ones as well), plus a lot of other components that Amazon sells - jewelry, pharmacies, etc. This seems like a way better fit for Amazon fresh (or Amazon anything) than Whole Foods. Whole Foods make zero sense as a competitor against Walmart.
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because the process to eliminate the competition will be favorable to consumers, but once they have decimated the competition the situation would be very bad for consumers re: monopoly
Walmart already has a large number of local monopolies and regulators appear not to give a crap. I think the "monopoly/regulation" angle is overblown. If they're not coming after Walmart, why Amazon? Never mind that Walmart alone proves that Amazon has not and can't have a monopoly of any kind.
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Old 06-18-2017, 04:40 PM   #41
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Re: Amazon Buying Whole Foods

https://www.youtube.com/watch?v=_0-aukVC3_s

Mainstream media running with the question of anti-trust now.

I doubt much comes of it but in 5-10 years if the political winds continue to shift towards populism then it is possible.

Agreed it is pretty empty but let's face it, not much politics is rooted in reason these days. Luddite mentality could take hold.

Last edited by Onlydo2days; 06-18-2017 at 04:46 PM.
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Old 06-18-2017, 04:47 PM   #42
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Re: Amazon Buying Whole Foods

You can't sell asparagus water in Wal-Mart.
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Old 06-18-2017, 04:54 PM   #43
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Re: Amazon Buying Whole Foods

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Mainstream media running with the question of anti-trust now.
Mainstream media runs with what goes through the head of the average man, to play to their prejudices. It bears little relationship to reality. Most news is fake news.

This will make Amazon a bit player in the supermarket system, far behind Walmart, Kroger, others. You think antitrust can be brought against someone with 2% market share? That's ridiculous.

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Old 06-18-2017, 05:04 PM   #44
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Nah, I don't think there will be any major obstacles to the deal going through. Just saying in 5-10 years if Amazon keeps on this trajectory I could see it being brought up. But who knows...

Obviously it would be absurd to have Walmart gut small businesses all throughout this country and Amazon is then the 1 that gets the attention of regulators.

And lastly, not to politard the thread up, but the President has mentioned this in the past and maybe would look to bring it up again to show that he was "right" on the campaign trail.
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Old 06-18-2017, 08:05 PM   #45
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Re: Amazon Buying Whole Foods

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Nah, I don't think there will be any major obstacles to the deal going through. Just saying in 5-10 years if Amazon keeps on this trajectory I could see it being brought up. But who knows...

Obviously it would be absurd to have Walmart gut small businesses all throughout this country and Amazon is then the 1 that gets the attention of regulators.

And lastly, not to politard the thread up, but the President has mentioned this in the past and maybe would look to bring it up again to show that he was "right" on the campaign trail.
There is no way it could happen as long as Walmart and other chains are still in business. Walmart, Target, others all sell online, retail, and groceries as well.
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Old 06-18-2017, 09:56 PM   #46
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Re: Amazon Buying Whole Foods

https://twitter.com/zerohedge/status/876601421281538048

With New Patent, Amazon Will Collect As Much Customer Data As Google
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Old 06-19-2017, 10:40 AM   #47
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Re: Amazon Buying Whole Foods

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Most stores already have this tech. You can use a personal scanner and buy the items as you shop without having to checkout in line.

Amazon Go looks like an interesting business model for them to crush convenience stores. Since the teaser video only shows singles and couples shopping, I'm assuming it's not meant for big stores with diverse consumers (parents toting kids)...

Amazon and Walmart are both digital flea markets and both are trying to become more luxurious. Amazon bought Whole Foods because of Walmart. Jet+Walmart = Amazon losing market share. Walmart has started buying up "premium" brands to re-position itself, and its been working. I'm surprised Walmart didn't acquire Whole Foods first.
Now it seems Walmart may actually make an offer for WFM... WFM going to be the next STRP?
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Old 06-19-2017, 11:06 AM   #48
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Re: Amazon Buying Whole Foods

The potential of Go integrating with the new 365 mini Whole Foods is interesting, but sort of misses the point of what Amazon is. This article is an interesting way to see the acquisition:

https://stratechery.com/2017/amazons...edium=webfeeds

Quote:
I suspect Amazon’s ambitions stretch further, though: Amazon Grocery Services will be well-placed to start supplying restaurants too, gaining Amazon access to another big cut of economic activity. It is the AWS model, which is to say it is the Amazon model, but like AWS, the key to profitability is having a first-and-best customer able to utilize the massive investment necessary to build the service out in the first place.

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Old 06-19-2017, 11:31 AM   #49
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Re: Amazon Buying Whole Foods

Walmart would have a bigger challenge in integrating WFM from a brand perspective - the average Whole Food shopper is a fairly big departure from Walmart (though Bonobos is a similar story). You could see push back similar to what craft brewers have experienced after selling out to the A-Bs of the world, despite their new distribution advantages.
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Old 06-19-2017, 11:40 AM   #50
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Re: Amazon Buying Whole Foods

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Walmart would have a bigger challenge in integrating WFM from a brand perspective - the average Whole Food shopper is a fairly big departure from Walmart (though Bonobos is a similar story). You could see push back similar to what craft brewers have experienced after selling out to the A-Bs of the world, despite their new distribution advantages.
All non-specialist (meaning all yellow-hued) beers are indistinguishable however, in taste. Only price and label differs. So you can indeed get a backlash because switching/label is purely a matter of perception, not utility.

Whole Foods however has a shopping experience and products that are unmatched. Jack the Ripper could own and your middle to upper middle cuck class would still shop there.
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