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Old 06-16-2017, 09:56 AM   #1
nyc999
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Amazon Buying Whole Foods

Amazon is buying WFM for 13.7 billion or approximately $42/share.

Link

We can use this thread to predict its impact on the future of grocery shopping - every competitor is getting slammed in the market today.

For one, this gives Amazon a ton of warehouses in a mix of urban/upscale suburban locations, and if they link it to Prime, it could get real interesting.
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Old 06-16-2017, 10:27 AM   #2
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Re: Amazon Buying Whole Foods

B&M infrastructure + inventory warehousing + delivery infrastructure = good opportunity for Bezos and co. I would say it definitely spells trouble for others in the space, but it was going to happen at some point; this (WFM purchase) just happens to be the way Amazon is taking their step forward

buying at that high of a premium though....?
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Old 06-16-2017, 10:42 AM   #3
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Re: Amazon Buying Whole Foods

John Mackey is an interesting character. Socialist hippie turned free market capitalist health food magnate.

Seems like a sharp move from Amazon. Bezos is the mf'in king! (well, apart from buying that turd newspaper washing post)

If they link it with prime that would be cool. Brick and mortar grocery shopping is the nut low.
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Old 06-16-2017, 11:17 AM   #4
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Re: Amazon Buying Whole Foods

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Brick and mortar grocery shopping is the nut low.
A lot of people don't feel this way - or see it as a necessary evil. People like to touch & feel perishable items before buying them.

I'm certainly convinced online shopping-delivery will grow in grocery, however B&M will remain king for some time.

The problem with all competitors is their large-format stores which were once appropriate are now over-sized (look at Kroger's same-store sales decline, and they actually have some of the best analytics in the business in terms of predicting customer behavior). Aldi, Lidl, and other stores of this nature are inflicting more pain than online.

Last edited by nyc999; 06-16-2017 at 11:36 AM.
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Old 06-16-2017, 11:21 AM   #5
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Re: Amazon Buying Whole Foods

Any chance regulators begin to take notice of Amazon?

They're in so many different businesses now, I guess you can say they have competitors in all of them similar to Microsoft in the late 90's but we're talking entertainment, groceries, retail, tech.

If the disruption comes fast and furious and causes too much societal upheaval then I think it is possible. Probably not a topic for another 5-10 years though.
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Old 06-16-2017, 11:44 AM   #6
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Re: Amazon Buying Whole Foods

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

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Old 06-16-2017, 12:16 PM   #7
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Re: Amazon Buying Whole Foods

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Originally Posted by nyc999 View Post
I'm certainly convinced online shopping-delivery will grow in grocery, however B&M will remain king for some time.
I agree, this has some hurdles. Fresh stuff (ie fruits, vegtables, meat etc.) are things people want to see, touch, feel.

The canned. boxed or frozen stuff easily falls into commoditized delivery type stuff. But right now it is way cheaper just to go to a store. I have ordered food stuffs from Amazon in the past. Always something I just couldn't find/get at local groceries. And always extremely HIGH priced! The pricing has to be at least competitive (it isn't right now) for Amazon groceries to make sense.

A box of cereal that costs $2 at Walmart costs $4.50 at a regular grocery store and $7 on Amazon. Before I ever tell Alexa "buy paper towels" I am gonna spend 1/3 of the price to buy them at Walmart or Target. I have never been in a Whole Foods (closest is about 7 miles away) but this seem to be a very niche type of store to me.

I think Amazon is genius but think this will be the toughest nut they have tried to crack. So far from my observation they are not even close and I am surprised how the stock market is treating this.
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Old 06-16-2017, 12:18 PM   #8
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Re: Amazon Buying Whole Foods

Whole Foods is niche like $1000 iPhones are niche.
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Old 06-16-2017, 12:21 PM   #9
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Re: Amazon Buying Whole Foods

Agree, Amazon Go will be a game changer if they can work out the kinks. That plus more locations for Prime Now -- pretty cool.
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Old 06-16-2017, 12:39 PM   #10
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Re: Amazon Buying Whole Foods

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

interesting video. my first reaction to the news was why didn't they just go after a low cost grocery that would allow them to streamline their 'cheap' delivery system.

I get pairing the 'newest in tech' with the premier grocery chain, but I don't think they match eachothers' strengths. Whole Foods makes up their extreme prices by providing the best shopping experience (lighting, high ceilings, free samples, helpful employees, prepared food, in-store food, etc.). so the idea of picking up your preselected groceries (or having them delivered at WF prices) doesn't seem to add that much value. The in-store shopping app experience in the video does seem interesting, though.

I bet the free-spirit WF workers are going to be thrilled to get to know Big Corp
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Old 06-16-2017, 12:52 PM   #11
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Re: Amazon Buying Whole Foods

at worst though, they are buying a $10 billion company for $13.5 and adding a bunch of Prime Now locations. my friends that don't have cars HATE going to the grocery stores.
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Old 06-16-2017, 12:55 PM   #12
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Re: Amazon Buying Whole Foods

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

Another great video:
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Old 06-16-2017, 12:57 PM   #13
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Re: Amazon Buying Whole Foods

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interesting video. my first reaction to the news was why didn't they just go after a low cost grocery that would allow them to streamline their 'cheap' delivery system.

I get pairing the 'newest in tech' with the premier grocery chain, but I don't think they match eachothers' strengths. Whole Foods makes up their extreme prices by providing the best shopping experience (lighting, high ceilings, free samples, helpful employees, prepared food, in-store food, etc.). so the idea of picking up your preselected groceries (or having them delivered at WF prices) doesn't seem to add that much value. The in-store shopping app experience in the video does seem interesting, though.

I bet the free-spirit WF workers are going to be thrilled to get to know Big Corp
It's because Amazon's culture is all about small, iterative tests. They generally prove the concept and create the tech for their own internal use, and then they open it up to others to leverage.

They did the same thing with AWS and FBA. Get it to work and then open up the tech for everyone else to leverage, allowing them to throw fuel on the fire to scale it fast.

They have proved the Amazon Go concept with their store in seattle that only amazon employees can shop at. Then they expand to whole foods which will be a larger scale, then they will license the technology to other stores. Once it becomes part of the normal purchase flow, customers will demand it and Amazon will be there to provide the service and the whole point of sale industry will change.

That's the idea anyway.
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Old 06-16-2017, 01:06 PM   #14
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Re: Amazon Buying Whole Foods

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at worst though, they are buying a $10 billion company for $13.5 and adding a bunch of Prime Now locations. my friends that don't have cars HATE going to the grocery stores.
amazon can buy a company like whole foods for free if you think about it. over paying 3.5 is good if you're selling but amazon basically picks this up for free
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Old 06-16-2017, 03:10 PM   #15
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Re: Amazon Buying Whole Foods

no idea about impact on the stock but I think this is great for consumers
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Old 06-16-2017, 03:19 PM   #16
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Re: Amazon Buying Whole Foods

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no idea about impact on the stock but I think this is great for consumers
Funny thing is with their near 3% gain in the market based on the news, Amazon essentially got WFM for free.
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Old 06-16-2017, 04:39 PM   #17
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Re: Amazon Buying Whole Foods

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Old 06-16-2017, 05:27 PM   #18
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Re: Amazon Buying Whole Foods

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Originally Posted by nyc999 View Post
Funny thing is with their near 3% gain in the market based on the news, Amazon essentially got WFM for free.
Can you imagine the smile on Bezos' face when the market closed?

Like the market, I think this was a good move for AMZN.
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Old 06-16-2017, 06:36 PM   #19
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Re: Amazon Buying Whole Foods

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Funny thing is with their near 3% gain in the market based on the news, Amazon essentially got WFM for free.
That's not how things work...
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Old 06-17-2017, 09:12 AM   #20
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Re: Amazon Buying Whole Foods

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Originally Posted by Onlydo2days View Post
Any chance regulators begin to take notice of Amazon?

They're in so many different businesses now, I guess you can say they have competitors in all of them similar to Microsoft in the late 90's but we're talking entertainment, groceries, retail, tech.

If the disruption comes fast and furious and causes too much societal upheaval then I think it is possible. Probably not a topic for another 5-10 years though.
they would be fools not to. In a couple years amazon will be the standard oil of our time.

Least congress could do would be to stop subsidizing them by charging more at USPS to break even
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Old 06-17-2017, 09:13 AM   #21
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Re: Amazon Buying Whole Foods

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no idea about impact on the stock but I think this is great for consumers
in short term yes, in long term no.
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Old 06-17-2017, 09:23 AM   #22
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Re: Amazon Buying Whole Foods

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they would be fools not to. In a couple years amazon will be the standard oil of our time.
There's robust competition still.

Regulators are hugely hands off now. Apple have a monopoly on certain phone designs, thanks to litigiousness and patents for things that shouldn't be patented. They have a completely closed hardware -> software -> services ecosystem in a way that would make Microsoft at its worse, blush. They are far worse than Amazon, yet regulators don't go near them.

Why would they touch Amazon? Not to mention, Bezos is a shark with political influence - look at his purchase of the Washington Post, which makes zero sense from a financial perspective.
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Old 06-17-2017, 11:29 AM   #23
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Re: Amazon Buying Whole Foods

not saying they touch amazon now, saying they may need to in a few years the way things are going.

patents are just starting to lose some of their impenetrability. Recent decision to not have all cases to go east texas will help

https://arstechnica.com/tech-policy/...in-east-texas/
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Old 06-17-2017, 11:31 AM   #24
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Re: Amazon Buying Whole Foods

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in short term yes, in long term no.
Can you elaborate on why you think this?
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Old 06-17-2017, 12:55 PM   #25
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Re: Amazon Buying Whole Foods

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Can you elaborate on why you think this?
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
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