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Amazon to Acquire Whole Foods for $13.7B

1687 points by whatok 9y ago

nihaar 9y ago
I'd be curious about what this also means for Instacart given their strategic partnership with Whole Foods and their direct competition with Amazon Fresh.
deleted 9y ago
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davidiach 9y ago
I wonder if they will keep the brand or change it to Amazon.
- whatok 9y ago
  Said it will operate as a standalone business for now.
  - opportune 9y ago
    Completely standalone, or integrated into the Amazon infrastructure while maintaining the Whole Foods brand and product line? I could see Amazon using whole foods as a kind of local "base" for grocery delivery services. Having a physical store to offload perishables onto if online demand doesn't match supply really makes sense.
    - jordache 9y ago
      Margin on them asparagus water is tremendous!
- noway421 9y ago
  Could be assimilated with the Amazon brand. Say, Amazon Whole Foods (AWF for short).
- brad0 9y ago
  Most likely they'll keep it. Amazon has acquired brands in the past and kept their name. Twitch is a good example.
djhworld 9y ago
I wonder if they'll roll out the tech they showed a few months ago for the store in Seattle where you didn't have to check out.
- tedmiston 9y ago
  The impression I got was that the store is more of an R&D project. It didn't work super well or scale with number of people so they had to artificially limit food traffic to keep it working. I'd be surprised if they rolled that out in an environment as busy and complex as Whole Foods stores so fast (or ever).
dkural 9y ago
Better buy than Slack for $9B.
- dexterdog 9y ago
  I was thinking exactly the same thing except that WF might be a less profitable business.
  - dkural 9y ago
    I think in the long run you are likely be right - at scale software margins are amazing. As of today, Slack looses some money & is unprofitable.
    - dexterdog 9y ago
      Really? Slack is bringing in 150m/yr. They can't make money with that product at that rate?
      - meritt 9y ago
        Of course they can, but an extremely profitable well-oiled small company rarely gets acquired. You need to have way more employees than necessary and running at a loss. Slack runs a chat app and has 870 employees. It's beyond absurd.
        dexterdog 9y ago
        No idea they had that many employees. Any idea how many actually work on the product from a technical perspective?
        bduerst 9y ago
        What percent of that is support and how many customers do they have? Not saying you're wrong, just that there's overhead for software as it scales for enterprises.
- 9y ago
ethbro 9y ago
"Da $#&@?!" Sometimes I forget just how big Amazon is. ... But it's nice to know I can get my artisanal, single-source, Fair Trade, organic, small-farm, no-GMO cucumber water with one day shipping now.
- heroprotagonist 9y ago
  Or one-hour shipping with Amazon Prime Now, which is beginning to crop up in a lot of places with Amazon Prime Fresh. I tried Amazon Prime Now in Denver yesterday to buy some fruit. I went for the free shipping in a 2 hour window instead of the $8 one-hour shipping. I never used Amazon Prime Fresh, because of the monthly fee and sense of commitment that forces. But when you can get a lot of the same stuff (eg, fresh fruit) without the monthly subscription via Amazon Prime Now, it's more tempting to try out. I'm a little worried about how big Amazon is getting, though.
  - throwanem 9y ago
    Fruit from Prime Now is of variable quality. Thus far, for example, I've seen two suppliers of Granny Smith apples, one of which produces large, flavorful specimens, and the other of which does not. Better any apples than none at all, but it hasn't really encouraged me to investigate their grocery delivery options in more detail.
JumpCrisscross 9y ago
Aw, poor Blue Apron.
- whatok 9y ago
  Poor Instacart too. Can't imagine they'll keep them around for long.
- tedmiston 9y ago
  Blue Apron is not a good company relative to the other meal kit delivery services anyway. Their recipes are overly simplistic and their whole experience using UX dark patterns limiting which meals one can get in combination turned me off, and misleading people regarding cancellation. The higher quality meal kits like Home Chef won't have this problem because they give you, for about the same price, more complex recipes with cool ingredients like demi-glace. There are enough things you can't buy in small quantities easily.
  - emodendroket 9y ago
    I felt the opposite way; the recipes I got when I tried Blue Apron were more trouble than I really wanted to bother with on a weeknight.
    - tedmiston 9y ago
      Yeah, I can relate. I probably cook 3 meal kits every 2 weeks when I'm doing them which is on/off, and I feel like it is a time commitment (especially cleanup). So, I could commit 30-45 minutes and get a Blue Apron level meal that's usually ~5/10 experience or commit 15 more minutes to get something really nice one that's ~9/10.
      - shiftpgdn 9y ago
        Practice and sharp knives will dramatically change how quickly you can prep, cook, serve and cleanup a blue apron or plated meal. I can usually beat the estimated time by 10+ minutes.
coleca 9y ago
If the brick and mortar grocers weren't scared of Amazon before, they sure are now.
- Nicholas_C 9y ago
  Investors are scared too. WalMart shares down 5%, Target down 8%.
scotchio 9y ago
Oof. I wonder what this means for Whole Foods culture and employees. If you don't know, John Mackey, the CEO / founder, is a major believer in conscious capitalism and of empowering his employees. Whole Food employees get paid pretty darn well with some crazy good benefits for their industry and line-of-work (UNION FREE most of the time too!). WF banks on them being true believers and motivators of the cause - including dedicating a fair amount of paid time to trainings. I've heard mix stories about how Amazon treats employees. I wonder how that will mesh. So I guess I'm asking: * What is going to happen with employee culture? * What is going to happen with all the "Fair Trade" deals WF has in place that might not be the most economical decision now? * Here comes store automation and hefty lay-offs? Source: Worked at WF for 3 years
- pc86 9y ago
  It's nice to see non-union employees treated well and paid well, not because of any negative feelings toward unions or unionization, but because I think it shows that you can be a successful capitalist without trying to suck every ounce of productivity and profit out of your lowest-paid employees.
  - dx034 9y ago
    While I fully agree that it's great to see employees treated well, Whole Foods is not an example that you can be a successful capitalist this way. They worked well for a while but the reason they got bought now is because they struggled over the past years. Probably unrelated to their treatment of employees (US groceries is very competitive at the moment) but AMZN didn't buy a hugely successful company.
    - bjelkeman-again 9y ago
      The day I sell a company for $13Bn I will declare myself successful. Not everything is going to be a a half a trillion dollar company.
      - atonse 9y ago
buryat 9y ago
I wonder if they're going to implement Amazon Go in Whole Foods https://www.amazon.com/b?node=16008589011 https://www.amazon.com/b?node=16008589011
- dharma1 9y ago
  pretty sure that's the partly the motivation behind the acquisition
  - dx034 9y ago
    Probably in the long term. Over the next years, the technology is not likely to be ready for the number of customers a wholefoods can have. But the stores should work well as distribution centers for grocery (and other) deliveries.
    - dharma1 9y ago
      Yep it will take a while. But it's a faster and less risky route to market than Amazon branded brick and mortar grocery stores from scratch. And many other synergies like you say
plusbryan 9y ago
What does this mean for Instacart I wonder? Will Amazon shut them off from their stores?
- themagician 9y ago
  Probably. Which is good, because AmazonFresh has much better inventory control and tracking than Instacart—which has none.
salesguy222 9y ago
Checkmate, brick and mortar!! Amazon is eating the world.
- balozi 9y ago
  Well...isn't Whole Foods brick and mortar?
  - salesguy222 9y ago
    In 10 years, Whole Foods will not have retail locations, and its distribution network will have shifted to 100% online orders ;) and, i should add, kroger and supervalu and etc will be struggling dinosaurs like sears
- castis 9y ago
  I dont know if you intended an /s to follow this but brick and mortar stores as a concept aren't going anywhere.
  - salesguy222 9y ago
    Nah, no sarcasm intended. There will still be brick and mortar stores in the future, but it will not be the main method of shopping- online will be. This is especially the case for food. It is not getting cheaper to run a brick and mortar operation with many moving parts. That is why Amazon is winning :) Only art galeries with high margin unique sales and low overhead costs will be surviving 10 years from now
phreeza 9y ago
Somewhat off topic, but I have had a weird thought circulating in my head (triggered by reading Red Plenty) that I wanted to put out there: What is the relationship between a centrally planned economy as for example Gosplan was trying to run in the USSR, and the presence of these huge market-like but centralized entities like Amazon and Wal-Mart inside a free-market economy? This becomes particularly interesting because Amazon apparently does not have any particular interest in turning a profit. A central problem faced by Gosplan was the collection of high quality data about supply chains and the estimation of the utility function of consumers. I would say Amazon is in a pretty good position to do both right now. Another question, somewhat related: At what point does it become profitable for Amazon to lobby for more redistributive taxation? This might sound paradoxical because you would assume that Amazon represents the interests of it's owners, who would probably suffer under such a taxation scheme. But shouldn't there be a point at which giving more disposable income to poor people will boost the overall income of an entity Amazon (since Amazon doesn't sells many flat-screen TVs but not as many mansions or yachts)?
- AndrewDucker 9y ago
  The major difference is that if Amazon stop running well then someone else will come along and replace them. Whereas government is a monopoly, so if it runs badly then it doesn't automatically get replaced. Now, democracy is supposed to fix this, by allowing you to vote for a different supplier of government every few years. But because of the voting system in some countries (like the US and the UK) it's actually really hard to do this, because everything gets turned into a black/white struggle between opposing forces, rather than lots of options being available for you make a choice between.
  - emodendroket 9y ago
    A large business has a lot of tools at its disposal to snuff out upstart competitors in a permissive legal environment like we live in today.
  - izacus 9y ago
    Hmm, as I remember the socialist governments were replaced (not easily, but they were). Have we even seen a conglomerate of AMZN size replaced in living memory?
StevePerkins 9y ago
Wow... all the articles I've been reading about Whole Foods lately deal with how they're hurting, and losing market share to more affordable competitors like Trader Joe's. If this is about Amazon thinking they can turn things around for Whole Foods, then it will certainly mean drastic changes to price, selection, and employee structure. If this is about Amazon using a brick-and-mortar chain as a tool to help Amazon's own ventures (e.g. grocery delivery, local storage for same-day deliveries, product return and support locations, etc), then it will certainly mean drastic changes what a Whole Foods store even is. Either way, I can't imagine a course in which Whole Foods as we know it isn't basically over. Which doesn't necessarily bother me (I migrated to Trader Joe's and similar competitors long ago), but does seem like a big deal in the grand scheme of things. The grocery industry was heading in a Walmart-ish direction... and Whole Foods was almost single-handedly responsible for bringing a counterculture into the mainstream, and forcing all the other chains to reverse course and up their game.
- chillingeffect 9y ago
  > drastic changes to price, selection, and employee structure. Yes I think we'll see more customer tracking (data of high-incomers) and more automated checkouts. And eventually an "organic-lite" low-end brand. These aren't even particular to Amazon, just competitive measures. WF has spawned a number of competitors in the last 5-10 years. Amazon is just brusque enough to do it.
- ZanyProgrammer 9y ago
  Whole Foods culture is a goner, but Whole Foods culture as of yesterday was already drastically different from WF culture as of a decade ago. Increased competition, the Great Recession and some self inflicted wounds have already hurt WF.
- deelowe 9y ago
  I think this is more about amazon easily acquiring a ton of retail space for it's JIT order deliver business. I'm starting to think they're actually serious about this drone delivery stuff.
AndrewDucker 9y ago
https://twitter.com/dkberman/status/875701677504024576 https://twitter.com/dkberman/status/875701677504024576 "Amazon did not just buy Whole Foods grocery stores. It bought 431 upper-income, prime-location distribution nodes for everything it does."
- maxerickson 9y ago
  I don't think that is right, Whole Foods stores are already full of...food. They don't have room for hundreds of additional products, never mind tens of thousands.
  - emodendroket 9y ago
    Yeah, and I can't imagine the kind of places Whole Foods is located making any kind of sense as a warehouse.
  - zebrafish 9y ago
    The products Amazon is trying to distribute with this deal are.... food products.
    - maxerickson 9y ago
      I feel like you are ignoring the context I replied to, where the person quoted a tweet saying Amazon would use the stores for everything they do.
    - Spooky23 9y ago
      Amazon could get rid of the big bullshit medicine section that Whole Foods has and replace it with useful products.
      - upvotinglurker 9y ago
        The bullshit medicine must be lucrative, though, or the section wouldn't be so big. (Not saying the medicine isn't bullshit, just that people apparently like to buy it anyway.)
rmoriz 9y ago
Looks to me like the ultimate war between grocery stores in the US will be fought out between Amazon/WFM (premium, delivery) and ALDI/Lidl (discount, no-frills). As a German I'm amazed by the "food haul" videos on YouTube and the positive feedback for ALDI US (belongs to ALDI Süd), Trader Joe's (ALDI Nord) and Lidl (part of Schwarz Gruppe, they just started in the US yesterday).
- dx034 9y ago
  Trader Joe's could also play a role. Basically also Aldi, just the other part (Aldi North whereas Aldi stores in the US are run by Aldi South). They have the money and motivation to really fight back and know how to achieve the same cost level as Aldi/Lidl.
  - rmoriz 9y ago
    ALDI Nord and Süd have some family issues and probably won't combine their US ventures. I see the Schwarz Gruppe (Lidl, Kaufland) as the biggest contender in the US. Kroger is probably gonna have a very bad time.
    - dx034 9y ago
      I didn't mean that they'd combine volumes, but both could fight for share. So you have 3 contenders, 2x Aldi and Lidl. Lidl probably has most money to spend but the US market is huge, they can all grow at their limits without threatening each other too much.
  - deleted 9y ago
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- pjc50 9y ago
  Aldi/Lidl have really taken over in the UK in the last 10 years. I'm not really sure how they manage it - more, smaller stores?
  - dx034 9y ago
codecamper 9y ago
Amazon is getting too big. How's this for an investment strategy... Long AMZN, short a basket of all other mid to large retailers & grocers.
- bbctol 9y ago
  Agree on the getting too big; how's this for a political strategy... bust the trusts again EDIT: and for those pointing out (correctly!) that amazon doesn't violate antitrust, http://www.yalelawjournal.org/article/amazons-antitrust-paradox http://www.yalelawjournal.org/article/amazons-antitrust-para... is a good article
- dx034 9y ago
  The acquirer stock price often falls after an acquisition. So probably not a really good strategy. Conglomerates have happened in the past. They become very big until they stop making a lot of money and people realise that they could be more efficient if you split them up. Amazon and Google can afford growing so much because they have a very successful business line. If growth there stops they would likely start selling some parts.
  - emodendroket 9y ago
    > Conglomerates have happened in the past. They become very big until they stop making a lot of money and people realise that they could be more efficient if you split them up. Yeah, who could forget when companies like Standard Oil or AT&T decided to split up, entirely through the power of market forces, with no government intervention at all.
    - dx034 9y ago
      Those are different examples. There are still countless competitors in each of their businesses, no reason for the government to act.
    - asr 9y ago
      Conglomerates are companies that hold unrelated businesses. Berkshire Hathaway is a conglomerate. Railroads and car insurance in the same company! Standard oil and AT&T were not broken up because they were conglomerates. They were broken up because they were monopolies in single (or closely related) markets.
tcbawo 9y ago
Perishable goods like groceries are one of the few businesses that Amazon is not in yet. My guess is that Amazon is looking to take Pantry to the next level.
- chrisper 9y ago
  What about Amazon fresh?
- jonknee 9y ago
  What do you mean? Currently I can have fresh groceries delivered to my door by an Amazon Fresh truck or I can drive to a local Amazon Fresh pickup store...
ckastner 9y ago
What an exciting development! It will be interesting to watch Amazon apply its logistics experience to a large-scale groceries operation.
balozi 9y ago
Nothing Amazon does makes sense immediately. Only in hindsight does the strategy emerge. What would be also helpful would be for Amazon to disrupt the wine and liquor sector.
- tantalor 9y ago
  > disrupt the wine and liquor sector Explain?
  - spydum 9y ago
    Maybe they mean the inefficiency in the producer -> distributor-> retailer chain? What value does the middle guy add?
    - dx034 9y ago
      Aldi/Lidl will make sure that happens. They already buy directly from producers around the world (they are the biggest wine retailer in Germany and quite big in some other European countries) so they'll just use the same producers for their US business. From experience Aldi is quite good when it comes to wine in the middle price segment. Often 20-30% cheaper than comparable wines in other stores.
    - op00to 9y ago
      Would require an insane amount of political lobbying to get rid of the legally obligated three tier system. Maybe Amazon has the $$ to do that?
    - ohyes 9y ago
      Liquor is heavily regulated on a state by state basis. The distributor relationship is often required by law.
      - Danihan 9y ago
        So Amazon will create a spin off a distributor company
dawhizkid 9y ago
This is not good for Instacart. My understanding is WF was their biggest partner and source of revenue. No way amazon will use them.
- zebrafish 9y ago
  Why? Instacart uses humans to pick inventory from a "warehouse" and deliver it to the buyer. Amazon needs people to pick and pack, they can't just use robots to store cereal boxes on the nearest shelf in the grocery store. I bet Instacart was a major reason why Amazon bought WF. Actually, didn't Apoorva work for Amazon before creating Instacart?
  - tuna-piano 9y ago
    I would definitely guess not. Why would Amazon pick and pack from a retail store and not a distribution center? And what does Instacart bring to the table? Amazon already has a website and seems to have no trouble building gigantic on-demand workforces. What else does Instacart have? I would guess close to 100% of Instacart users already use Amazon for things as well. I don't see things ending up well for Instacart at all.
    - zebrafish 9y ago
      I'm thinking that the grocery store would be the distribution center. I don't know what their transportation lanes look like but most produce just goes from the field to the grocery store. If you're already storing it there, why put it in a distro center when these stores are in the same locations. Instacart brings a userbase. Heck, maybe Amazon just buys Instacart as well. Not sure if amazon's FCs are currently equipped to store produce and milk and other things like that. Just seems like they can take advantage of existing supply chains and synergies if they embrace Instacart.
      - foobarbazetc 9y ago
        Amazon has no need for Instacart. None. They already have the infrastructure in place to replace Instacart overnight. Every Instacart shopper currently working for Instacart hates Instacart. Amazon can just hire them all away, run their own logistics, profit. That's not to say it won't be worse than Instacart. It most definitely will be.
joycey 9y ago
I can't wait for drones to deliver organic quinoa straight to my door.
xutopia 9y ago
Amazon wants to kill retail and their biggest threat is Walmart. Walmart currently uses groceries as a way to get people in stores and when they're in the store they buy other things as well. Now imagine if you are Amazon and you'd like all those people going to Walmart to just use your services. If I could get my groceries delivered to my door and only need to go to stores once in a blue moon I'd be really happy.
- Chaebixi 9y ago
  > Walmart currently uses groceries as a way to get people in stores and when they're in the store they buy other things as well. Walmart groceries is a sad and pretty recent phenomenon. It got people in the stores just with cheap prices long before they had groceries.
  - dsfyu404ed 9y ago
    Walmart only has good grocery selection at super-centers for the most part
    - Eire_Banshee 9y ago
      Which is almost all of them now?
dpratt 9y ago
I wonder how long until the first beta of Elastic Grocery System?
- honestoHeminway 9y ago
  How long till somebody develops the UBER of groceries? Your neighbour could do your shopping for you.
  - cercatrova 9y ago
    Like a decentralized Instacart, interesting.
    - omarchowdhury 9y ago
      Why isn't there a total decentralized on demand platform? The bulk of the value is in the people performing the services, not the app technology to connect them.
  - harrisreynolds 9y ago
    That is what Instacart and Shipt are. Marketplaces that pair people who don't want to go to the grocery store with people who are willing to go for them. Exchanging time for money. Same as Uber, but instead of moving people, they're moving milk & eggs.
joshfarrant 9y ago
$13.7B is quite a satisfying amount. That's $1 for every year since the Big Bang.
- omarchowdhury 9y ago
  Or $30M per Whole Foods (rented) stores.
tuna-piano 9y ago
I'm confused. Amazon is known to work backward from an imagined future press release, and then do the actions necessary to make that press release. How does Amazon see the future in this case? -Amazon already has PrimeNow and Amazon Fresh, which offer a great grocery delivery service. For those who have tried these services, it's easy to see how addicting they are vs going to a physical store. -I can't see Amazon using existing retail stores as distribution centers. I would think you really only need one grocery distribution center for each city in America, and PrimeNow (and AmazonFresh) already has that! Or, has Amazon determined that picking/packing from a retail store is actually efficient? Retail as a DC seems tough to automate, items are in the wrong spot, suspiciously missing, etc. I don't get it. -I would have guessed that online grocery from highly automated distribution centers is where the majority of the market would be within ~20 years. Does Amazon, the king of online, not think that!? -Or does Amazon just believe that they can run Whole Foods better than it is currently run? -Do they just want the purchasing, existing relationships, etc to also sell their customers through other channels?
- tuna-piano 9y ago
  One thought. People still like food and food things and being social, and the "farmers market" feeling. Even in a future which makes online grocery great for mundane shopping, people still need stuff to do. Whole Foods already has bars, cafes, and restaurants. Maybe Whole Foods locations turn into places where people can hang out, try new things, and buy online grocery delivery (or pickup delivery as well)? Who should be trembling in their sleep even more so with this news: -Blue Apron, HelloFresh, Plated, etc -Drizzly, alcohol delivery, etc (I think absolutely doomed) -WalMart? (Maybe completely different customer sets) -Target, Kroger, other grocery? -Instacart (I think absolutely doomed) Whole Foods is a large cafe/fast casual business. I assume competitors in that space aren't scared at all yet... but I would not necessarily sleep well if I were Starbucks or Chipotle. Amazon seems to play to win, and they usually win. Do they want to play is my main question.
  - tuna-piano 9y ago
    Or maybe Amazon sees its new checkout technology (that knows which items you buy automatically) as so special that it's better to roll it out at stores it owns than sell to existing retailers?
deleted 9y ago
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md2be 9y ago
Instacarte is screwed
wcchandler 9y ago
Now that they control the distribution, they should control the supply. Well functioning, scalable greenhouse solutions should definitely pique Bezo's interests. I'd love to be a head grower over a large operation like that.
cphoover 9y ago
I think this might signal the walk in walk out payment paradigm of Amazon Go going national. If we could say goodbye to lines, I am all for it.
- electriclove 9y ago
  ^ This. Quick video on what Amazon Go is: https://www.youtube.com/watch?v=NrmMk1Myrxc https://www.youtube.com/watch?v=NrmMk1Myrxc
hew 9y ago
This is a Walmart counterattack. Walmart is on the verge of capturing large swathes of busy "middle-class buyer" pickup orders. Amazon saw it and responded quickly.
- snarf21 9y ago
  Or Bezos was at home and jokingly said "Alexa, add Whole Foods to my shopping list".
- dsfyu404ed 9y ago
  Busy middle class buyers don't go to whole foods except for definitions of middle that are inclusive enough to appease the diversity committee at UCB.
  - TheCoelacanth 9y ago
    Middle class people definitely shop at Whole Foods. There aren't enough upper class people to sustain something as low margin as a grocery store.
tmaly 9y ago
Grocery stores are a tough market with razor thin margins. Whole Foods has a ton of competitors like Trader Joes that happens to still have organic options. Since I did not see it asked, any idea if we will see some new Prime benefit at Wholefoods?
- aerovistae 9y ago
  Out of curiosity, what's your insight into grocery store profit margins? Were you an exec at a grocery chain, or something giving a similar window into their numbers?
  - thomasthomas 9y ago
    they're called 10-k's. https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&SIC=5411&owner=exclude&count=40&hidefilings=0 https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&S...
  - tmaly 9y ago
    I work in the finance industry, so I see a lot of earnings releases.
dkrich 9y ago
I don't mean to be a naysayer, I don't really know what this means. But with all of the euphoria I'm hearing regarding Amazon and the doom-and-gloom regarding "traditional" grocers, I can't help but remind myself how horribly bad people are at predicting the future. Most of the people I'm hearing make predictions about what this means have been wrong about everything to this point. Not saying it won't be a game-changer, but it is fascinating to watch people extrapolate this out to the extremes as soon as the news hits the ticker. To put it another way- if it were that obvious that buying Whole Foods was going to make Amazon the dominant grocery seller, why weren't people predicting that they would do it all along and asking what they were waiting for? It isn't until Amazon acts that people say "Oh yeah, that was the right move."
- omarchowdhury 9y ago
  Scott Galloway predicted AMZN buying WFM last month: http://www.businessinsider.com/scott-galloway-explains-exactly-why-amazon-would-acquire-whole-foods-retail-acquisition-billions-2017-6 http://www.businessinsider.com/scott-galloway-explains-exact...
  - dkrich 9y ago
    I saw this and I give him credit although I think his idea that Amazon will be the only winner is pretty irrational. Less than 10% of purchases made today are online and even with that number growing, there are lots and lots of very smart companies with tremendous resources who can compete, not to mention lots of very smart people who can innovate in this space in ways Amazon won't think of and disrupt them. It happens virtually every time a newcomer is predicted to become monopolistic.
    - omarchowdhury 9y ago
      I agree, he also has a video where he posits that Amazon will kill brands, and make brands obsolete. I don't think we will ever live in a world where every product is manufactured and packaged by Amazon. Sure Amazon would love that outcome, but it goes against the consumers need for choice, and then there's also the fact that brands have the resources to compete like you mentioned.
aezell 9y ago
In this part of the country, it seems like Kroger's ClickList service has been very successful. I'd imagine other larger chains in other parts of the country are doing similar things. Sure, it's not delivery but if you are driving right past the store on the way home and don't even have to get out of the car, it's a pretty close competitor. That's especially true in smaller communities where Amazon's grocery delivery doesn't yet make sense. Might this be a partial reason that Amazon is making a bet on the grocery market?
lwlml 9y ago
Amazon is now (or more so now) like Evil Corp in the Mr. Robot kind of way. You can ship your Evil groceries via Evil Prime purchased via voice-command with your Evil assistant device paid for with your Evil credit-card. Evil. Frankly I don't buy as much from WF anymore considering that what they carry is much more like "organic junk-food" than actual food. If you really want to support the "cause", find yourself a local farmer or CSA to buy from and support them directly. https://www.localharvest.org/csa/ https://www.localharvest.org/csa/
- dx034 9y ago
  They don't offer bank accounts yet. Only then Mr Robot could come and change the world by hacking them /s
  - awgneo 9y ago
    They do offer credit cards through third parties. They also have the Amazon payment service that allows third parties to process transactions through Amazon.
  - petepete 9y ago
    Not quite on Samsung's level in Korea, yet.
  - nissimk 9y ago
    Credit accounts + gift card balances is almost the same thing.
    - dx034 9y ago
      No, they don't really control the money. If all amazon balances were gone it would not be a significant event for the US. Evil corp is like a Bank of America or Wells Fargo. If they close, people can't pay rent, food, etc. For Amazon that's (luckily) not the case (yet).
  - sjs382 9y ago
    You can now deposit cash into your Amazon account via bank transfer (one-way transactions) for a 2% rewards benefit. https://www.geekwire.com/2017/amazon-gives-2-rewards-back-prime-members-deposit-cash-via-bank-account/ https://www.geekwire.com/2017/amazon-gives-2-rewards-back-pr...
skinnymuch 9y ago
Wow all cash? Amazon's cash pile will be pretty small relatively speaking after this. Less than $10B.
- codecamper 9y ago
  I read they will have to borrow the purchase amount.
  - skinnymuch 9y ago
    Ah okay. I tried searching around a bit for more details but skimming only got me the same info from main outlets. Do you know where you read that?
Geekette 9y ago
You know the race for global trade dominance is heating up and playing out regionally when the same company tries to buy Slack and Whole Foods in the same week. While one is familiar with conglomerates holding a diverse array of businesses, it's fascinating and slightly unnerving (in terms of market power increasingly concentrated in fewer hands) to see it in motion.
- deleted 9y ago
  [deleted]
- mikekij 9y ago
  Agreed. I love Amazon prime, and also love Slack. But I fear the day when all of the "good companies" end up being owned by one corporate overlord.
  - joering2 9y ago
    That's nothing new... Media: http://libreria.sourceforge.net/library/Free_Culture/images/media-concentration-cl.png http://libreria.sourceforge.net/library/Free_Culture/images/... Food: http://2.bp.blogspot.com/-7KY4dEnHmnc/U9bkkriu8hI/AAAAAAAAD9U/Iay01ZL4amg/s1600/Food+Co%27s.png http://2.bp.blogspot.com/-7KY4dEnHmnc/U9bkkriu8hI/AAAAAAAAD9...
    - lkbm 9y ago
      A large share of media companies owned by a single conglomerate. A large share of food companies owned by a single conglomerate. A large share of retail, cloud hosting, and online messaging owned by a single conglomerate. You're right that there's long been some serious consolidation in sectors, but those two examples seem a little different from Amazon grabbing up large portions of multiple sectors.
  - codecamper 9y ago
    Also, I cannot think of a software technology that was created & shared by Amazon.
deleted 9y ago
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dforrestwilson 9y ago
What happens to Sprout's Farmers Market? People seem to think it will be bought, but this would seem to be negative news because the price paid for Whole Foods was about half what Sprout's is trading at.
aerovistae 9y ago
If Hacker News had gold I would give it to you.
- aerovistae 9y ago
  I don't understand why I got 10 downvotes on this one. What is the matter with this comment? What am I missing here?
  - bpodgursky 9y ago
    HN will heavily downvote anything that (1) is a short, cheap joke, or (2) smells like reddit.
  - chrisper 9y ago
    I'd guess that it is because people don't like reddit/4chan/meme type of comments here.
  - askafriend 9y ago
    This comment adds no value and doesn't drive interesting discussion forward. Reddit norms don't apply here. If you have a low effort comment, just keep it in your head.
  - askafriend 9y ago
    This comment adds no value and doesn't drive interesting discussion forward. Reddit norms don't apply here. If you have a low effort comment, just keep it in your head. Also the original post your were replying to was a recycled tweet anyway.
  - kinkrtyavimoodh 9y ago
    You did nothing wrong. The HN-hive-mind deludes itself that it's a higher order being.
- sctb 9y ago
  We detached this subthread from https://news.ycombinator.com/item?id=14568978 https://news.ycombinator.com/item?id=14568978 and marked it off-topic.
cercatrova 9y ago
https://www.youtube.com/watch?v=cA2-iMz479o https://www.youtube.com/watch?v=cA2-iMz479o I watched this video a while ago about what Amazon Go is a precursor for. In summary, if AWS is renting out server infrastructure for people, then you can imagine that Amazon can make the infrastructure to lease out Amazon Go to other stores. They first integrate it with Whole Foods, then as customers expect no more checkout areas, they will only go to Whole Foods because it's faster and maybe cheaper. Then because customers want it everywhere, Amazon could force other stores like Walmart and Target to integrate Amazon Go infrastructure to their stores, without Amazon directly competing with these stores, and make a ton of money leasing it out without spending money on building whole new stores. Of course, the acquisition could also be like nodes for warehousing and delivery, but both avenues are not mutually exclusive.
- cphoover 9y ago
  bingo... Implementation will be key. But I also agree in believing that this will be their strategy.
- tuna-piano 9y ago
  Counterpoint... is Amazon Go really that difficult to build? If given three years, do you not think a different software company can build a similar system as well? Is this type of system really a winner-take-all market?
  - cercatrova 9y ago
    Sure but scope is required in order to create the monopoly, which only Amazon has currently. They can distribute to a thousand stores at once, and a startup competitor will not be able to compete, especially because the switching cost is so high for a customer like Target since it's hardware instead of the traditional software model. If everyone is using Amazon Go, then the network effect is established and shoppers won't download a separate app for something else.
  - dx034 9y ago
    Same with AWS. First they were the only ones, now they seem to lose market share to Google and Microsoft. Amazon doesn't have a monopoly in any of their businesses, they're just very successful in a lot of them.
hendzen 9y ago
Why would they buy Whole Foods as opposed to Grubhub/Seamless. Seems like a better fit...
sidegrid 9y ago
This is another step in how an online book store slowly becomes the Umbrella Corporation.
duxup 9y ago
I buy things on amazon when I feel the price is good or better than I can get locally. Whole Foods doesn't fit that mold at all.... now maybe they provide different products but then Whole Foods isn't Whole Foods anymore.
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tgb29 9y ago
I do my banking and food shopping at Walmart; I wonder if Whole Foods will offer this. Probably not, but I'm still excited to see Amazon moving into the food retail business.
masonicb00m 9y ago
Sucks for Instacart.
tuna-piano 9y ago
Some quotes from a 3 month old article about Amazon and physical grocery[1] “The whole premise [of online grocery] is that you’re saving people a trip to the store, but people actually like going to the store to buy groceries.” “A bunch of smart people at Amazon have been thinking about re-imagining the next phase of physical retail. They want more share of the wallet, and habitual, frequent use of Amazon for groceries is the ultimate goal.” "Long term, a stronger grocery business could position Amazon to become a wholesale food-distribution business serving supermarkets, convenience stores, restaurants, hotels, hospitals and schools. " "A group of Amazon executives met late last year to discuss the disadvantage Amazon faced compared with grocery competitors such as Wal-Mart and Kroger because of its lack of physical stores and customer apprehension about buying fresh foods online. They decided they needed something more to jump-start Amazon’s grocery push beyond plans already under way for the Amazon Go convenience store, modeled for urban areas, and drive-in grocery pick-up stations suited for the suburbs." [1] https://www.bloomberg.com/news/features/2017-03-20/inside-amazon-s-battle-to-break-into-the-800-billion-grocery-market https://www.bloomberg.com/news/features/2017-03-20/inside-am...
foobarbazetc 9y ago
RIP Instacart.
chaostheory 9y ago
What percentage of instacart's business is tied to Whole Foods?
nojvek 9y ago
I quite like wholefoods. Now that Amazon will own it I feel less likely to support it. Amazon is a cut throat profit making machine at the expense of human exploitation. Wholefoods felt like the little guy who was trying to do things differently from mainstream supermarkets.
- chrisper 9y ago
  By that reasoning you would also have to stop visiting any website that uses AWS. I think that would mean you'd have to stop using the Internet entirely.
  - aylmao 9y ago
    Are you implying that it's unreasonable for him to dislike Amazon for its labour practices if he's an internet user? That doesn't make any sense.
    - chrisper 9y ago
      No. I tried to say that if he wants to avoid things to stop supporting Amazon, then he will have a hard time. A similar case would be Nestle, since they own so many products.
  - decebalus1 9y ago
    Wow! Overstatement of the day.
  - intopieces 9y ago
    Purity tests / "all or nothing" thinking is reductive. Everyone picks their battles. Ethical consumption is not possible in the light of a global economy.
  - konspence 9y ago
    Companies that use AWS are not owned by Amazon. WFM is. There is a big difference there.
panooper 9y ago
Pretty good rundown of reactions and implications of this deal here: http://circulaat.com/main/amazon-to-acquire-whole-foods-in-137-billion-bet-on-groceries-2 http://circulaat.com/main/amazon-to-acquire-whole-foods-in-1...
harrisreynolds 9y ago
HUGE news in the grocery delivery space. Groceries are one of the few large markets that require some proximity to customers due to costs and spoilage. Each grocery store is a type of mini-distribution center for grocery products. Shipt and Instacart have succeeded to date because they use existing distribution channels and set up marketplaces for the "last-mile" of delivery. This is in contrast to Webvan in the early 2000's who tried to do grocery delivery by building their own distribution and failed spectacularly. Amazon has become an expert in distribution and logistics. But it is clear that using their current model doesn't generally work with groceries (RIP Webvan, 1998-2001). Bananas need to be treated much differently than books. So what does Amazon do? But Whole Foods!! A moderate sized grocery store with a significant national footprint and lots of higher income customers. Now they instantly have a pre-built distribution channel that is already optimized for the grocery business (which again is much different than non-perishable consumer goods etc). Things definitely just got interesting in this space!! I still believe that Instacart and Shipt can succeed, but they need to maintain a laser focus on making their shoppers and customers happy! And grow as fast as possible while Amazon digests Whole Foods! [Note: I was the early CTO for Shipt responsible for building their grocery delivery platform and initial engineering team. Go Shipt!]
- FLUX-YOU 9y ago
  > I still believe that Instacart and Shipt can succeed Amazon could just buy Shipt and/or Instacart as well, barring FTC intervention. I'm not sure what B2B partners Shipt has, but I know they have a mobile app. Joining the mobile app to Amazon would give Shipt a boost and Amazon a start, I'd imagine. [I worked with one of Shipt's mobile developers at a previous position. Go Shipt!]
  - metalliqaz 9y ago
    Why buy them when they can crush them?
  - kp1234321 9y ago
    Serious question: would it be beneficial for Amazon to buy out an existing grocery distribution company like Instacart when Amazon is already an expert at distribution?
awinter-py 9y ago
ugh. In 1966 the supreme court forced the 3rd largest grocery chain in LA to divest the 6th-largest (which they bought in 1960). https://en.wikipedia.org/wiki/Vons https://en.wikipedia.org/wiki/Vons
psadri 9y ago
What will happen to Instacart?
danm07 9y ago
I wonder if instead of Amazon building out their own stores, they're going to use Whole Food's... unlikely but possibility is there if they do it well.
deleted 9y ago
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tonychu 9y ago
Whole Foods market share will continue to increase with rising homosexual and gender confused culture.
deleted 9y ago
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guiomie 9y ago
"The transaction also may help Amazon sideline Instacart Inc., a startup that has delivered grocery orders from Whole Foods stores in more than 20 states and Washington, D.C." ... I wonder how this will play. Is Instacart's business threaten by losing Whole Food as a client?
pfarnsworth 9y ago
What about Instacart? They had a sweet deal, if it continues then it means Amazon will buy them. If it gets cancelled it means Instacart is fucked.
jarjoura 9y ago
This might just be a strategic move to block Instacart as every WF I've been to recently had created an entire checkout section just for Instacart.
- magic_beans 9y ago
  Whoa, really? I've never seen this in New York.
  - sethhochberg 9y ago
    Are you upstate? In the stores I've used around NYC, the Instacart presence in WF is huge. Branded coolers by the doors for deliveries waiting to go out and everything.
justinzollars 9y ago
Amazon's Global conquest continues.
subhsandhu1 9y ago
http://songspk.desilyrics.in/ http://songspk.desilyrics.in/
Robotbeat 9y ago
I'm from the Twin Cities in Minnesota which has tons of co-op grocery stores. They're successful and growing with cheaper prices than Whole Foods and much more progressive values (as well as giving regular folk an ownership stake in a crucial community institution). Whole Foods seemed to me to be just a poor copy of cooperative grocers. I'm surprised no one else has mentioned that in the comments here. I'm not shedding any tears for Whole Foods' "culture" now that they've been bought by Amazon. They were always a sort of sham-progressive company. In the words of Portlandia, "Whole Foods is CORPORATE." I suppose if you're going to be corporate, might as well go full Amazon. They do it very well.
- trophycase 9y ago
  Seward Co-op is literally my standard for grocery store. I always laugh at stuff like Whole Foods and Trader Joe's because, like you said, they are sham-progressive in every sense IMO.
  - HillaryBriss 9y ago
    interesting. i never thought of Trader Joes as progressive. do they try to market themselves that way?
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Tokkemon 9y ago
Just add it to the list of reasons to avoid Amazon.
ShakataGaNai 9y ago
The old joke is that it isn't "Whole Foods" but "Whole Paycheck" because of how expensive they are. I wonder how that will change with Amazon's typically price cutting ways. The two seem somewhat at odds with each other.
delaaxe 9y ago
If there's ever going to be a world government, it's probably going to be Amazon.
wavefunction 9y ago
I wouldn't say obviously. From my perspective Obamacare is fascist even as I support it compared to the alternatives save single-payer national healthcare. What other ideology than fascism best describes government coercion of its citizens to engage in business relationships with the insurance companies to ensure their profits remain at certain levels?
- jhall1468 9y ago
  It's not to ensure their profits remain at certain levels, the profits are capped, not floored. The reason for this particular market is because health care costs in this country have gone out of control, and a major factor in that was people without insurance not paying bills, resulting in higher costs. That's not facist simply because you don't like it.
  - wavefunction 9y ago
    I specifically said I like Obamacare more than any alternative other than single payer. And the profits are guaranteed by the individual mandate on young people.
    - jhall1468 9y ago
      You also said it's facist which is wrong. And the profits are not guaranteed by the individual mandate, ALL that's guaranteeing is a slow-down in healthcare costs that are spiraling out of control. Young people use healthcare. Everyone uses healthcare. When it goes unpaid, those of us that have insurance pay for those that don't. I'd rather have single payer too. But that doesn't make an "okay" alternative to it facist.
      - cholantesh 9y ago
        Nit: Why do you keep misspelling fascist?
- burkaman 9y ago
  I agree with Mackey, I don't have a good word for it. Fascism is not a good word for it, it means "an authoritarian and nationalistic right-wing system of government and social organization." This usually results in government control of industry, but that's not the defining feature of the ideology.
logingone 9y ago
Bezos will then start putting pressure on farmers. I don't know how these things work in the states, but the dairy industry would be the prime example in the UK.
snowman311 9y ago
AmazonFresh is an expensive service. The team is searching for routes to dominate the high-end grocery market (worth billions) before launching into the worldwide grocery market (worth hundreds of billions). AmazonFresh customers and Whole Foods customers value convenience and quality. They are much less price sensitive than most. Whole Foods has millions of customers. Amazon will surely be advertising AmazonFresh or some re-branded form of it - such as "Whole Foods Direct" - to Whole Foods customers. Do Whole Foods turn into AmazonFresh warehouses? Possibly, but it's unclear how the two business will eventually integrate. It's also possible that Instacart gets acquired by Amazon, but for the most part I see them getting screwed in this deal. Instacart's business development deal is like bringing a knife to a bomb-fight. The other major value this deal brings to Amazon is the industry-specific knowledge that the Whole Foods team brings. As a frequent East Coast, Whole Foods shopper, I am always amazed to see how much of their food comes from the West Coast/all over the world. I think the execs of AmazonFresh, who are mainly HomeGrocer/Webvan execs, appreciate the complicated logistics of doing the businesses. Amazon will be able to combine its software engineering knowledge/logistics knowledge with Whole Foods' expertise at creating an amazing grocery-shopping experience.
20years 9y ago
Does anyone else think that this purchase is largely in part so they can get AmazonFresh in a lot more places quickly? In my area where there is a big college campus, they have been hiring for AmazonFresh devs for over a year. We have no AmazonFresh here but we do have a Whole Foods.
- kevinsundar 9y ago
  Are we talking about SLO haha?
  - 20years 9y ago
    Yes :)
lucb1e 9y ago
Since the article doesn't mention it, Whole Foods is apparently: > an American supermarket chain exclusively featuring foods without artificial preservatives, colors, flavors, sweeteners, and hydrogenated fats. I was waiting for this to appear (a common grocery store with seen-as-healthy stuff) but it already exists. TIL.
neonbat 9y ago
i've been helping my friend with his channel and we were pitching for amazon to buy whole foods a few months ago: https://youtu.be/fvZ8mGZZins https://youtu.be/fvZ8mGZZins
yuhong 9y ago
I wonder what happens to Whole Foods business code of conduct, including the “Online Forums” approval requirement I dislike.
msoad 9y ago
This is very bad news for InstaCart. I know most of InstaCart orders are WholeFoods and CostCo
- karangoeluw 9y ago
  How do you know that?
gigatexal 9y ago
Well this is a huge exit for WholeFoods which was seeing fewer and fewer people enter it's stores and increased competition from value grocers introducing organic foods. A number of articles asked if WholeFoods had a future in this new environment. As for Amazon, I see this more as a real-estate play to help them further their new push into grocery and the no-checkout process.
synaesthesisx 9y ago
Anyone know if they'll pilot Amazon Go approach at some of these stores? I don't think it's nearly ready for scale but could see it working out for certain locations...
tanilama 9y ago
Well, if successful, it will be a great leap forward for Amazon to advance its grocery vision. Maybe some kinda deal will be given to Prime members? Amazon Go Wholefoods? For the employees, it is neutral, if the company keeps underperforming Amazon will surely do something about it.
coolziro 9y ago
Ok
collinmanderson 9y ago
I love the Windows Updates restart warning in the video. :)
bsder 9y ago
People are also forgetting that CEO Mackey was about to get ousted or his wings significantly clipped. I feel this is more Mackey cashing out than anything else. Whole Foods is about to change a lot and quickly.
bogomipz 9y ago
Interesting so they are looking to take on Costco in the organic grocery market then: http://www.seattletimes.com/business/retail/costco-becomes-largest-organic-grocer-analysts-say/ http://www.seattletimes.com/business/retail/costco-becomes-l... I'm surprised the article didn't mention this.
joveian 9y ago
One thing I haven't seen mentioned here yet is that I wonder if Amazon intends to sell on their regular online store some of the non-perishable items that Whole Foods sells. Currently, Amazon is not usually competitive vs. VitaCost, Lucky Vitamin, and Swanson Health. I didn't realize until checking just now that VitaCost is owned by Kroger.
nfriedly 9y ago
Bezos: "Alexa, buy me something from whole foods" Alexa: "Buying Whole Foods" Bezos: "Shit"
- niyazpk 9y ago
  Credit(?): https://twitter.com/ChicagoPhotoSho/status/875708981511163905 https://twitter.com/ChicagoPhotoSho/status/87570898151116390...
  - IAmGraydon 9y ago
    Nice catch. Plagiarizing for upvotes is rather sad.
    - ransom1538 9y ago
      So is public shaming.
  - nfriedly 9y ago
    Sorry, my wife sent it to me, didn't realize there was a different source. Too late to edit now :( Although the first reply there says the original source was https://mobile.twitter.com/JesalTV/status/875705460313255936 https://mobile.twitter.com/JesalTV/status/875705460313255936 FWIW
good_vibes 9y ago
I have a job interview with Amazon next week. Wish me luck, I'll be likely doing entry level work but I hope I can keep working on websites for clients (have 2 currently), keep learning data structures/algorithms, and build a personal project. All this to one day get hired by Amazon for UX or web developer.
KeenanFeldspar 9y ago
I'm surprised they're keeping Mackey after he did this: https://dealbook.nytimes.com/2007/07/12/whole-foods-ceo-posted-online-attacks-about-wild-oats/ https://dealbook.nytimes.com/2007/07/12/whole-foods-ceo-post... There was an SEC probe https://www.forbes.com/2007/07/16/whole-foods-sec-markets-equity-cx_jl_0716markets30.html https://www.forbes.com/2007/07/16/whole-foods-sec-markets-eq...
rollingpebbles 9y ago
WF has been struggling because they helped paved the way for mainstreaming of organic, sustainable, etc. They couldn't pivot really and everyone else was undercutting their high prices and they've been unable to increase profitable foot-traffic to stay alive. Amazon could basically use WF as a laboratory for deploying Amazon Go without having to build grocery logistics from scratch. Hope it works out.
codecamper 9y ago
This is all Marc Andreessen's fault. If we had just left it at Gopher, none of this would have happened!
trophycase 9y ago
Now, with a prime membership I'll never need to leave my house!
- supercoder 9y ago
  The American dream
ransom1538 9y ago
Race to the bottom! Amazon checklist: 1) Import cheap Chinese goods, 2) avoid sales tax, 3) destroy the environment (china), 4) destroy brick and mortar stores, 5) destroy small/medium business. === PROFIT!
gryz 9y ago
Liked a joke from by spouse: Mr. Bezos: - Alexa, buy me something from Whole Foods Alexa: - Good. Buying Whole Foods.
mickrussom 9y ago
I've noticed that comments here that are critical of Bezos gets met with downvoting. Sad. Why Microsoft got the 3rd degree and Amazon gets a pass is beyond me. I guess that large unethical companies like Amazon can use AIs to police sentiments about them and do the needful. We should start looking for anti AI mechanisms in discourse as well as work to ensure paid sockpuppeting and gas lighting is not going on. The truth is going to be harder to get at these days.

1687 points by whatok 9y ago

I'd be curious about what this also means for Instacart given their strategic partnership with Whole Foods and their direct competition with Amazon Fresh.

deleted 9y ago

[deleted]

davidiach 9y ago

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

whatok 9y ago
Said it will operate as a standalone business for now.
- opportune 9y ago
  Completely standalone, or integrated into the Amazon infrastructure while maintaining the Whole Foods brand and product line? I could see Amazon using whole foods as a kind of local "base" for grocery delivery services. Having a physical store to offload perishables onto if online demand doesn't match supply really makes sense.
  - jordache 9y ago
    Margin on them asparagus water is tremendous!
noway421 9y ago
Could be assimilated with the Amazon brand. Say, Amazon Whole Foods (AWF for short).
brad0 9y ago
Most likely they'll keep it. Amazon has acquired brands in the past and kept their name. Twitch is a good example.

djhworld 9y ago

I wonder if they'll roll out the tech they showed a few months ago for the store in Seattle where you didn't have to check out.

tedmiston 9y ago
The impression I got was that the store is more of an R&D project. It didn't work super well or scale with number of people so they had to artificially limit food traffic to keep it working. I'd be surprised if they rolled that out in an environment as busy and complex as Whole Foods stores so fast (or ever).

dkural 9y ago

Better buy than Slack for $9B.

dexterdog 9y ago
I was thinking exactly the same thing except that WF might be a less profitable business.
- dkural 9y ago
  I think in the long run you are likely be right - at scale software margins are amazing. As of today, Slack looses some money & is unprofitable.
  - dexterdog 9y ago
    Really? Slack is bringing in 150m/yr. They can't make money with that product at that rate?
    - meritt 9y ago
      Of course they can, but an extremely profitable well-oiled small company rarely gets acquired. You need to have way more employees than necessary and running at a loss. Slack runs a chat app and has 870 employees. It's beyond absurd.
      - dexterdog 9y ago
        No idea they had that many employees. Any idea how many actually work on the product from a technical perspective?
      - bduerst 9y ago
        What percent of that is support and how many customers do they have? Not saying you're wrong, just that there's overhead for software as it scales for enterprises.
9y ago

ethbro 9y ago

"Da $#&@?!" Sometimes I forget just how big Amazon is. ... But it's nice to know I can get my artisanal, single-source, Fair Trade, organic, small-farm, no-GMO cucumber water with one day shipping now.

heroprotagonist 9y ago
Or one-hour shipping with Amazon Prime Now, which is beginning to crop up in a lot of places with Amazon Prime Fresh. I tried Amazon Prime Now in Denver yesterday to buy some fruit. I went for the free shipping in a 2 hour window instead of the $8 one-hour shipping. I never used Amazon Prime Fresh, because of the monthly fee and sense of commitment that forces. But when you can get a lot of the same stuff (eg, fresh fruit) without the monthly subscription via Amazon Prime Now, it's more tempting to try out. I'm a little worried about how big Amazon is getting, though.
- throwanem 9y ago
  Fruit from Prime Now is of variable quality. Thus far, for example, I've seen two suppliers of Granny Smith apples, one of which produces large, flavorful specimens, and the other of which does not. Better any apples than none at all, but it hasn't really encouraged me to investigate their grocery delivery options in more detail.

JumpCrisscross 9y ago

Aw, poor Blue Apron.

whatok 9y ago
Poor Instacart too. Can't imagine they'll keep them around for long.
tedmiston 9y ago
Blue Apron is not a good company relative to the other meal kit delivery services anyway. Their recipes are overly simplistic and their whole experience using UX dark patterns limiting which meals one can get in combination turned me off, and misleading people regarding cancellation. The higher quality meal kits like Home Chef won't have this problem because they give you, for about the same price, more complex recipes with cool ingredients like demi-glace. There are enough things you can't buy in small quantities easily.
- emodendroket 9y ago
  I felt the opposite way; the recipes I got when I tried Blue Apron were more trouble than I really wanted to bother with on a weeknight.
  - tedmiston 9y ago
    Yeah, I can relate. I probably cook 3 meal kits every 2 weeks when I'm doing them which is on/off, and I feel like it is a time commitment (especially cleanup). So, I could commit 30-45 minutes and get a Blue Apron level meal that's usually ~5/10 experience or commit 15 more minutes to get something really nice one that's ~9/10.
    - shiftpgdn 9y ago
      Practice and sharp knives will dramatically change how quickly you can prep, cook, serve and cleanup a blue apron or plated meal. I can usually beat the estimated time by 10+ minutes.

coleca 9y ago

If the brick and mortar grocers weren't scared of Amazon before, they sure are now.

Nicholas_C 9y ago
Investors are scared too. WalMart shares down 5%, Target down 8%.

scotchio 9y ago

Oof. I wonder what this means for Whole Foods culture and employees. If you don't know, John Mackey, the CEO / founder, is a major believer in conscious capitalism and of empowering his employees. Whole Food employees get paid pretty darn well with some crazy good benefits for their industry and line-of-work (UNION FREE most of the time too!). WF banks on them being true believers and motivators of the cause - including dedicating a fair amount of paid time to trainings. I've heard mix stories about how Amazon treats employees. I wonder how that will mesh. So I guess I'm asking: * What is going to happen with employee culture? * What is going to happen with all the "Fair Trade" deals WF has in place that might not be the most economical decision now? * Here comes store automation and hefty lay-offs? Source: Worked at WF for 3 years

pc86 9y ago
It's nice to see non-union employees treated well and paid well, not because of any negative feelings toward unions or unionization, but because I think it shows that you can be a successful capitalist without trying to suck every ounce of productivity and profit out of your lowest-paid employees.
- dx034 9y ago
  While I fully agree that it's great to see employees treated well, Whole Foods is not an example that you can be a successful capitalist this way. They worked well for a while but the reason they got bought now is because they struggled over the past years. Probably unrelated to their treatment of employees (US groceries is very competitive at the moment) but AMZN didn't buy a hugely successful company.
  - bjelkeman-again 9y ago
    The day I sell a company for $13Bn I will declare myself successful. Not everything is going to be a a half a trillion dollar company.
    - atonse 9y ago

buryat 9y ago

I wonder if they're going to implement Amazon Go in Whole Foods https://www.amazon.com/b?node=16008589011 https://www.amazon.com/b?node=16008589011

dharma1 9y ago
pretty sure that's the partly the motivation behind the acquisition
- dx034 9y ago
  Probably in the long term. Over the next years, the technology is not likely to be ready for the number of customers a wholefoods can have. But the stores should work well as distribution centers for grocery (and other) deliveries.
  - dharma1 9y ago
    Yep it will take a while. But it's a faster and less risky route to market than Amazon branded brick and mortar grocery stores from scratch. And many other synergies like you say

plusbryan 9y ago

What does this mean for Instacart I wonder? Will Amazon shut them off from their stores?

themagician 9y ago
Probably. Which is good, because AmazonFresh has much better inventory control and tracking than Instacart—which has none.

salesguy222 9y ago

Checkmate, brick and mortar!! Amazon is eating the world.

balozi 9y ago
Well...isn't Whole Foods brick and mortar?
- salesguy222 9y ago
  In 10 years, Whole Foods will not have retail locations, and its distribution network will have shifted to 100% online orders ;) and, i should add, kroger and supervalu and etc will be struggling dinosaurs like sears
castis 9y ago
I dont know if you intended an /s to follow this but brick and mortar stores as a concept aren't going anywhere.
- salesguy222 9y ago
  Nah, no sarcasm intended. There will still be brick and mortar stores in the future, but it will not be the main method of shopping- online will be. This is especially the case for food. It is not getting cheaper to run a brick and mortar operation with many moving parts. That is why Amazon is winning :) Only art galeries with high margin unique sales and low overhead costs will be surviving 10 years from now

phreeza 9y ago

Somewhat off topic, but I have had a weird thought circulating in my head (triggered by reading Red Plenty) that I wanted to put out there: What is the relationship between a centrally planned economy as for example Gosplan was trying to run in the USSR, and the presence of these huge market-like but centralized entities like Amazon and Wal-Mart inside a free-market economy? This becomes particularly interesting because Amazon apparently does not have any particular interest in turning a profit. A central problem faced by Gosplan was the collection of high quality data about supply chains and the estimation of the utility function of consumers. I would say Amazon is in a pretty good position to do both right now. Another question, somewhat related: At what point does it become profitable for Amazon to lobby for more redistributive taxation? This might sound paradoxical because you would assume that Amazon represents the interests of it's owners, who would probably suffer under such a taxation scheme. But shouldn't there be a point at which giving more disposable income to poor people will boost the overall income of an entity Amazon (since Amazon doesn't sells many flat-screen TVs but not as many mansions or yachts)?

AndrewDucker 9y ago
The major difference is that if Amazon stop running well then someone else will come along and replace them. Whereas government is a monopoly, so if it runs badly then it doesn't automatically get replaced. Now, democracy is supposed to fix this, by allowing you to vote for a different supplier of government every few years. But because of the voting system in some countries (like the US and the UK) it's actually really hard to do this, because everything gets turned into a black/white struggle between opposing forces, rather than lots of options being available for you make a choice between.
- emodendroket 9y ago
  A large business has a lot of tools at its disposal to snuff out upstart competitors in a permissive legal environment like we live in today.
- izacus 9y ago
  Hmm, as I remember the socialist governments were replaced (not easily, but they were). Have we even seen a conglomerate of AMZN size replaced in living memory?

StevePerkins 9y ago

Wow... all the articles I've been reading about Whole Foods lately deal with how they're hurting, and losing market share to more affordable competitors like Trader Joe's. If this is about Amazon thinking they can turn things around for Whole Foods, then it will certainly mean drastic changes to price, selection, and employee structure. If this is about Amazon using a brick-and-mortar chain as a tool to help Amazon's own ventures (e.g. grocery delivery, local storage for same-day deliveries, product return and support locations, etc), then it will certainly mean drastic changes what a Whole Foods store even is. Either way, I can't imagine a course in which Whole Foods as we know it isn't basically over. Which doesn't necessarily bother me (I migrated to Trader Joe's and similar competitors long ago), but does seem like a big deal in the grand scheme of things. The grocery industry was heading in a Walmart-ish direction... and Whole Foods was almost single-handedly responsible for bringing a counterculture into the mainstream, and forcing all the other chains to reverse course and up their game.

chillingeffect 9y ago
> drastic changes to price, selection, and employee structure. Yes I think we'll see more customer tracking (data of high-incomers) and more automated checkouts. And eventually an "organic-lite" low-end brand. These aren't even particular to Amazon, just competitive measures. WF has spawned a number of competitors in the last 5-10 years. Amazon is just brusque enough to do it.
ZanyProgrammer 9y ago
Whole Foods culture is a goner, but Whole Foods culture as of yesterday was already drastically different from WF culture as of a decade ago. Increased competition, the Great Recession and some self inflicted wounds have already hurt WF.
deelowe 9y ago
I think this is more about amazon easily acquiring a ton of retail space for it's JIT order deliver business. I'm starting to think they're actually serious about this drone delivery stuff.

AndrewDucker 9y ago

https://twitter.com/dkberman/status/875701677504024576 https://twitter.com/dkberman/status/875701677504024576 "Amazon did not just buy Whole Foods grocery stores. It bought 431 upper-income, prime-location distribution nodes for everything it does."

maxerickson 9y ago
I don't think that is right, Whole Foods stores are already full of...food. They don't have room for hundreds of additional products, never mind tens of thousands.
- emodendroket 9y ago
  Yeah, and I can't imagine the kind of places Whole Foods is located making any kind of sense as a warehouse.
- zebrafish 9y ago
  The products Amazon is trying to distribute with this deal are.... food products.
  - maxerickson 9y ago
    I feel like you are ignoring the context I replied to, where the person quoted a tweet saying Amazon would use the stores for everything they do.
  - Spooky23 9y ago
    Amazon could get rid of the big bullshit medicine section that Whole Foods has and replace it with useful products.
    - upvotinglurker 9y ago
      The bullshit medicine must be lucrative, though, or the section wouldn't be so big. (Not saying the medicine isn't bullshit, just that people apparently like to buy it anyway.)

rmoriz 9y ago

Looks to me like the ultimate war between grocery stores in the US will be fought out between Amazon/WFM (premium, delivery) and ALDI/Lidl (discount, no-frills). As a German I'm amazed by the "food haul" videos on YouTube and the positive feedback for ALDI US (belongs to ALDI Süd), Trader Joe's (ALDI Nord) and Lidl (part of Schwarz Gruppe, they just started in the US yesterday).

dx034 9y ago
Trader Joe's could also play a role. Basically also Aldi, just the other part (Aldi North whereas Aldi stores in the US are run by Aldi South). They have the money and motivation to really fight back and know how to achieve the same cost level as Aldi/Lidl.
- rmoriz 9y ago
  ALDI Nord and Süd have some family issues and probably won't combine their US ventures. I see the Schwarz Gruppe (Lidl, Kaufland) as the biggest contender in the US. Kroger is probably gonna have a very bad time.
  - dx034 9y ago
    I didn't mean that they'd combine volumes, but both could fight for share. So you have 3 contenders, 2x Aldi and Lidl. Lidl probably has most money to spend but the US market is huge, they can all grow at their limits without threatening each other too much.
- deleted 9y ago
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pjc50 9y ago
Aldi/Lidl have really taken over in the UK in the last 10 years. I'm not really sure how they manage it - more, smaller stores?
- dx034 9y ago

codecamper 9y ago

Amazon is getting too big. How's this for an investment strategy... Long AMZN, short a basket of all other mid to large retailers & grocers.

bbctol 9y ago
Agree on the getting too big; how's this for a political strategy... bust the trusts again EDIT: and for those pointing out (correctly!) that amazon doesn't violate antitrust, http://www.yalelawjournal.org/article/amazons-antitrust-paradox http://www.yalelawjournal.org/article/amazons-antitrust-para... is a good article
dx034 9y ago
The acquirer stock price often falls after an acquisition. So probably not a really good strategy. Conglomerates have happened in the past. They become very big until they stop making a lot of money and people realise that they could be more efficient if you split them up. Amazon and Google can afford growing so much because they have a very successful business line. If growth there stops they would likely start selling some parts.
- emodendroket 9y ago
  > Conglomerates have happened in the past. They become very big until they stop making a lot of money and people realise that they could be more efficient if you split them up. Yeah, who could forget when companies like Standard Oil or AT&T decided to split up, entirely through the power of market forces, with no government intervention at all.
  - dx034 9y ago
    Those are different examples. There are still countless competitors in each of their businesses, no reason for the government to act.
  - asr 9y ago
    Conglomerates are companies that hold unrelated businesses. Berkshire Hathaway is a conglomerate. Railroads and car insurance in the same company! Standard oil and AT&T were not broken up because they were conglomerates. They were broken up because they were monopolies in single (or closely related) markets.

tcbawo 9y ago

Perishable goods like groceries are one of the few businesses that Amazon is not in yet. My guess is that Amazon is looking to take Pantry to the next level.

chrisper 9y ago
What about Amazon fresh?
jonknee 9y ago
What do you mean? Currently I can have fresh groceries delivered to my door by an Amazon Fresh truck or I can drive to a local Amazon Fresh pickup store...

ckastner 9y ago

What an exciting development! It will be interesting to watch Amazon apply its logistics experience to a large-scale groceries operation.

balozi 9y ago

Nothing Amazon does makes sense immediately. Only in hindsight does the strategy emerge. What would be also helpful would be for Amazon to disrupt the wine and liquor sector.

tantalor 9y ago
> disrupt the wine and liquor sector Explain?
- spydum 9y ago
  Maybe they mean the inefficiency in the producer -> distributor-> retailer chain? What value does the middle guy add?
  - dx034 9y ago
    Aldi/Lidl will make sure that happens. They already buy directly from producers around the world (they are the biggest wine retailer in Germany and quite big in some other European countries) so they'll just use the same producers for their US business. From experience Aldi is quite good when it comes to wine in the middle price segment. Often 20-30% cheaper than comparable wines in other stores.
  - op00to 9y ago
    Would require an insane amount of political lobbying to get rid of the legally obligated three tier system. Maybe Amazon has the $$ to do that?
  - ohyes 9y ago
    Liquor is heavily regulated on a state by state basis. The distributor relationship is often required by law.
    - Danihan 9y ago
      So Amazon will create a spin off a distributor company

dawhizkid 9y ago

This is not good for Instacart. My understanding is WF was their biggest partner and source of revenue. No way amazon will use them.

zebrafish 9y ago
Why? Instacart uses humans to pick inventory from a "warehouse" and deliver it to the buyer. Amazon needs people to pick and pack, they can't just use robots to store cereal boxes on the nearest shelf in the grocery store. I bet Instacart was a major reason why Amazon bought WF. Actually, didn't Apoorva work for Amazon before creating Instacart?
- tuna-piano 9y ago
  I would definitely guess not. Why would Amazon pick and pack from a retail store and not a distribution center? And what does Instacart bring to the table? Amazon already has a website and seems to have no trouble building gigantic on-demand workforces. What else does Instacart have? I would guess close to 100% of Instacart users already use Amazon for things as well. I don't see things ending up well for Instacart at all.
  - zebrafish 9y ago
    I'm thinking that the grocery store would be the distribution center. I don't know what their transportation lanes look like but most produce just goes from the field to the grocery store. If you're already storing it there, why put it in a distro center when these stores are in the same locations. Instacart brings a userbase. Heck, maybe Amazon just buys Instacart as well. Not sure if amazon's FCs are currently equipped to store produce and milk and other things like that. Just seems like they can take advantage of existing supply chains and synergies if they embrace Instacart.
    - foobarbazetc 9y ago
      Amazon has no need for Instacart. None. They already have the infrastructure in place to replace Instacart overnight. Every Instacart shopper currently working for Instacart hates Instacart. Amazon can just hire them all away, run their own logistics, profit. That's not to say it won't be worse than Instacart. It most definitely will be.

joycey 9y ago

I can't wait for drones to deliver organic quinoa straight to my door.

xutopia 9y ago

Amazon wants to kill retail and their biggest threat is Walmart. Walmart currently uses groceries as a way to get people in stores and when they're in the store they buy other things as well. Now imagine if you are Amazon and you'd like all those people going to Walmart to just use your services. If I could get my groceries delivered to my door and only need to go to stores once in a blue moon I'd be really happy.

Chaebixi 9y ago
> Walmart currently uses groceries as a way to get people in stores and when they're in the store they buy other things as well. Walmart groceries is a sad and pretty recent phenomenon. It got people in the stores just with cheap prices long before they had groceries.
- dsfyu404ed 9y ago
  Walmart only has good grocery selection at super-centers for the most part
  - Eire_Banshee 9y ago
    Which is almost all of them now?

dpratt 9y ago

I wonder how long until the first beta of Elastic Grocery System?

honestoHeminway 9y ago
How long till somebody develops the UBER of groceries? Your neighbour could do your shopping for you.
- cercatrova 9y ago
  Like a decentralized Instacart, interesting.
  - omarchowdhury 9y ago
    Why isn't there a total decentralized on demand platform? The bulk of the value is in the people performing the services, not the app technology to connect them.
- harrisreynolds 9y ago
  That is what Instacart and Shipt are. Marketplaces that pair people who don't want to go to the grocery store with people who are willing to go for them. Exchanging time for money. Same as Uber, but instead of moving people, they're moving milk & eggs.

joshfarrant 9y ago

$13.7B is quite a satisfying amount. That's $1 for every year since the Big Bang.

omarchowdhury 9y ago
Or $30M per Whole Foods (rented) stores.

tuna-piano 9y ago

I'm confused. Amazon is known to work backward from an imagined future press release, and then do the actions necessary to make that press release. How does Amazon see the future in this case? -Amazon already has PrimeNow and Amazon Fresh, which offer a great grocery delivery service. For those who have tried these services, it's easy to see how addicting they are vs going to a physical store. -I can't see Amazon using existing retail stores as distribution centers. I would think you really only need one grocery distribution center for each city in America, and PrimeNow (and AmazonFresh) already has that! Or, has Amazon determined that picking/packing from a retail store is actually efficient? Retail as a DC seems tough to automate, items are in the wrong spot, suspiciously missing, etc. I don't get it. -I would have guessed that online grocery from highly automated distribution centers is where the majority of the market would be within ~20 years. Does Amazon, the king of online, not think that!? -Or does Amazon just believe that they can run Whole Foods better than it is currently run? -Do they just want the purchasing, existing relationships, etc to also sell their customers through other channels?

tuna-piano 9y ago
One thought. People still like food and food things and being social, and the "farmers market" feeling. Even in a future which makes online grocery great for mundane shopping, people still need stuff to do. Whole Foods already has bars, cafes, and restaurants. Maybe Whole Foods locations turn into places where people can hang out, try new things, and buy online grocery delivery (or pickup delivery as well)? Who should be trembling in their sleep even more so with this news: -Blue Apron, HelloFresh, Plated, etc -Drizzly, alcohol delivery, etc (I think absolutely doomed) -WalMart? (Maybe completely different customer sets) -Target, Kroger, other grocery? -Instacart (I think absolutely doomed) Whole Foods is a large cafe/fast casual business. I assume competitors in that space aren't scared at all yet... but I would not necessarily sleep well if I were Starbucks or Chipotle. Amazon seems to play to win, and they usually win. Do they want to play is my main question.
- tuna-piano 9y ago
  Or maybe Amazon sees its new checkout technology (that knows which items you buy automatically) as so special that it's better to roll it out at stores it owns than sell to existing retailers?

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md2be 9y ago

Instacarte is screwed

wcchandler 9y ago

Now that they control the distribution, they should control the supply. Well functioning, scalable greenhouse solutions should definitely pique Bezo's interests. I'd love to be a head grower over a large operation like that.

cphoover 9y ago

I think this might signal the walk in walk out payment paradigm of Amazon Go going national. If we could say goodbye to lines, I am all for it.

electriclove 9y ago
^ This. Quick video on what Amazon Go is: https://www.youtube.com/watch?v=NrmMk1Myrxc https://www.youtube.com/watch?v=NrmMk1Myrxc

hew 9y ago

This is a Walmart counterattack. Walmart is on the verge of capturing large swathes of busy "middle-class buyer" pickup orders. Amazon saw it and responded quickly.

snarf21 9y ago
Or Bezos was at home and jokingly said "Alexa, add Whole Foods to my shopping list".
dsfyu404ed 9y ago
Busy middle class buyers don't go to whole foods except for definitions of middle that are inclusive enough to appease the diversity committee at UCB.
- TheCoelacanth 9y ago
  Middle class people definitely shop at Whole Foods. There aren't enough upper class people to sustain something as low margin as a grocery store.

tmaly 9y ago

Grocery stores are a tough market with razor thin margins. Whole Foods has a ton of competitors like Trader Joes that happens to still have organic options. Since I did not see it asked, any idea if we will see some new Prime benefit at Wholefoods?

aerovistae 9y ago
Out of curiosity, what's your insight into grocery store profit margins? Were you an exec at a grocery chain, or something giving a similar window into their numbers?
- thomasthomas 9y ago
  they're called 10-k's. https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&SIC=5411&owner=exclude&count=40&hidefilings=0 https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&S...
- tmaly 9y ago
  I work in the finance industry, so I see a lot of earnings releases.

dkrich 9y ago

I don't mean to be a naysayer, I don't really know what this means. But with all of the euphoria I'm hearing regarding Amazon and the doom-and-gloom regarding "traditional" grocers, I can't help but remind myself how horribly bad people are at predicting the future. Most of the people I'm hearing make predictions about what this means have been wrong about everything to this point. Not saying it won't be a game-changer, but it is fascinating to watch people extrapolate this out to the extremes as soon as the news hits the ticker. To put it another way- if it were that obvious that buying Whole Foods was going to make Amazon the dominant grocery seller, why weren't people predicting that they would do it all along and asking what they were waiting for? It isn't until Amazon acts that people say "Oh yeah, that was the right move."

omarchowdhury 9y ago
Scott Galloway predicted AMZN buying WFM last month: http://www.businessinsider.com/scott-galloway-explains-exactly-why-amazon-would-acquire-whole-foods-retail-acquisition-billions-2017-6 http://www.businessinsider.com/scott-galloway-explains-exact...
- dkrich 9y ago
  I saw this and I give him credit although I think his idea that Amazon will be the only winner is pretty irrational. Less than 10% of purchases made today are online and even with that number growing, there are lots and lots of very smart companies with tremendous resources who can compete, not to mention lots of very smart people who can innovate in this space in ways Amazon won't think of and disrupt them. It happens virtually every time a newcomer is predicted to become monopolistic.
  - omarchowdhury 9y ago
    I agree, he also has a video where he posits that Amazon will kill brands, and make brands obsolete. I don't think we will ever live in a world where every product is manufactured and packaged by Amazon. Sure Amazon would love that outcome, but it goes against the consumers need for choice, and then there's also the fact that brands have the resources to compete like you mentioned.

aezell 9y ago

In this part of the country, it seems like Kroger's ClickList service has been very successful. I'd imagine other larger chains in other parts of the country are doing similar things. Sure, it's not delivery but if you are driving right past the store on the way home and don't even have to get out of the car, it's a pretty close competitor. That's especially true in smaller communities where Amazon's grocery delivery doesn't yet make sense. Might this be a partial reason that Amazon is making a bet on the grocery market?

lwlml 9y ago

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

dx034 9y ago
They don't offer bank accounts yet. Only then Mr Robot could come and change the world by hacking them /s
- awgneo 9y ago
  They do offer credit cards through third parties. They also have the Amazon payment service that allows third parties to process transactions through Amazon.
- petepete 9y ago
  Not quite on Samsung's level in Korea, yet.
- nissimk 9y ago
  Credit accounts + gift card balances is almost the same thing.
  - dx034 9y ago
    No, they don't really control the money. If all amazon balances were gone it would not be a significant event for the US. Evil corp is like a Bank of America or Wells Fargo. If they close, people can't pay rent, food, etc. For Amazon that's (luckily) not the case (yet).
- sjs382 9y ago
  You can now deposit cash into your Amazon account via bank transfer (one-way transactions) for a 2% rewards benefit. https://www.geekwire.com/2017/amazon-gives-2-rewards-back-prime-members-deposit-cash-via-bank-account/ https://www.geekwire.com/2017/amazon-gives-2-rewards-back-pr...

skinnymuch 9y ago

Wow all cash? Amazon's cash pile will be pretty small relatively speaking after this. Less than $10B.

codecamper 9y ago
I read they will have to borrow the purchase amount.
- skinnymuch 9y ago
  Ah okay. I tried searching around a bit for more details but skimming only got me the same info from main outlets. Do you know where you read that?

Geekette 9y ago

You know the race for global trade dominance is heating up and playing out regionally when the same company tries to buy Slack and Whole Foods in the same week. While one is familiar with conglomerates holding a diverse array of businesses, it's fascinating and slightly unnerving (in terms of market power increasingly concentrated in fewer hands) to see it in motion.

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mikekij 9y ago
Agreed. I love Amazon prime, and also love Slack. But I fear the day when all of the "good companies" end up being owned by one corporate overlord.
- joering2 9y ago
  That's nothing new... Media: http://libreria.sourceforge.net/library/Free_Culture/images/media-concentration-cl.png http://libreria.sourceforge.net/library/Free_Culture/images/... Food: http://2.bp.blogspot.com/-7KY4dEnHmnc/U9bkkriu8hI/AAAAAAAAD9U/Iay01ZL4amg/s1600/Food+Co%27s.png http://2.bp.blogspot.com/-7KY4dEnHmnc/U9bkkriu8hI/AAAAAAAAD9...
  - lkbm 9y ago
    A large share of media companies owned by a single conglomerate. A large share of food companies owned by a single conglomerate. A large share of retail, cloud hosting, and online messaging owned by a single conglomerate. You're right that there's long been some serious consolidation in sectors, but those two examples seem a little different from Amazon grabbing up large portions of multiple sectors.
- codecamper 9y ago
  Also, I cannot think of a software technology that was created & shared by Amazon.

deleted 9y ago

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dforrestwilson 9y ago

What happens to Sprout's Farmers Market? People seem to think it will be bought, but this would seem to be negative news because the price paid for Whole Foods was about half what Sprout's is trading at.

aerovistae 9y ago

If Hacker News had gold I would give it to you.

aerovistae 9y ago
I don't understand why I got 10 downvotes on this one. What is the matter with this comment? What am I missing here?
- bpodgursky 9y ago
  HN will heavily downvote anything that (1) is a short, cheap joke, or (2) smells like reddit.
- chrisper 9y ago
  I'd guess that it is because people don't like reddit/4chan/meme type of comments here.
- askafriend 9y ago
  This comment adds no value and doesn't drive interesting discussion forward. Reddit norms don't apply here. If you have a low effort comment, just keep it in your head.
- askafriend 9y ago
  This comment adds no value and doesn't drive interesting discussion forward. Reddit norms don't apply here. If you have a low effort comment, just keep it in your head. Also the original post your were replying to was a recycled tweet anyway.
- kinkrtyavimoodh 9y ago
  You did nothing wrong. The HN-hive-mind deludes itself that it's a higher order being.
sctb 9y ago
We detached this subthread from https://news.ycombinator.com/item?id=14568978 https://news.ycombinator.com/item?id=14568978 and marked it off-topic.

cercatrova 9y ago

https://www.youtube.com/watch?v=cA2-iMz479o https://www.youtube.com/watch?v=cA2-iMz479o I watched this video a while ago about what Amazon Go is a precursor for. In summary, if AWS is renting out server infrastructure for people, then you can imagine that Amazon can make the infrastructure to lease out Amazon Go to other stores. They first integrate it with Whole Foods, then as customers expect no more checkout areas, they will only go to Whole Foods because it's faster and maybe cheaper. Then because customers want it everywhere, Amazon could force other stores like Walmart and Target to integrate Amazon Go infrastructure to their stores, without Amazon directly competing with these stores, and make a ton of money leasing it out without spending money on building whole new stores. Of course, the acquisition could also be like nodes for warehousing and delivery, but both avenues are not mutually exclusive.

cphoover 9y ago
bingo... Implementation will be key. But I also agree in believing that this will be their strategy.
tuna-piano 9y ago
Counterpoint... is Amazon Go really that difficult to build? If given three years, do you not think a different software company can build a similar system as well? Is this type of system really a winner-take-all market?
- cercatrova 9y ago
  Sure but scope is required in order to create the monopoly, which only Amazon has currently. They can distribute to a thousand stores at once, and a startup competitor will not be able to compete, especially because the switching cost is so high for a customer like Target since it's hardware instead of the traditional software model. If everyone is using Amazon Go, then the network effect is established and shoppers won't download a separate app for something else.
- dx034 9y ago
  Same with AWS. First they were the only ones, now they seem to lose market share to Google and Microsoft. Amazon doesn't have a monopoly in any of their businesses, they're just very successful in a lot of them.

hendzen 9y ago

Why would they buy Whole Foods as opposed to Grubhub/Seamless. Seems like a better fit...

sidegrid 9y ago

This is another step in how an online book store slowly becomes the Umbrella Corporation.

duxup 9y ago

I buy things on amazon when I feel the price is good or better than I can get locally. Whole Foods doesn't fit that mold at all.... now maybe they provide different products but then Whole Foods isn't Whole Foods anymore.

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tgb29 9y ago

I do my banking and food shopping at Walmart; I wonder if Whole Foods will offer this. Probably not, but I'm still excited to see Amazon moving into the food retail business.

masonicb00m 9y ago

Sucks for Instacart.

tuna-piano 9y ago

Some quotes from a 3 month old article about Amazon and physical grocery[1] “The whole premise [of online grocery] is that you’re saving people a trip to the store, but people actually like going to the store to buy groceries.” “A bunch of smart people at Amazon have been thinking about re-imagining the next phase of physical retail. They want more share of the wallet, and habitual, frequent use of Amazon for groceries is the ultimate goal.” "Long term, a stronger grocery business could position Amazon to become a wholesale food-distribution business serving supermarkets, convenience stores, restaurants, hotels, hospitals and schools. " "A group of Amazon executives met late last year to discuss the disadvantage Amazon faced compared with grocery competitors such as Wal-Mart and Kroger because of its lack of physical stores and customer apprehension about buying fresh foods online. They decided they needed something more to jump-start Amazon’s grocery push beyond plans already under way for the Amazon Go convenience store, modeled for urban areas, and drive-in grocery pick-up stations suited for the suburbs." [1] https://www.bloomberg.com/news/features/2017-03-20/inside-amazon-s-battle-to-break-into-the-800-billion-grocery-market https://www.bloomberg.com/news/features/2017-03-20/inside-am...

foobarbazetc 9y ago

RIP Instacart.

chaostheory 9y ago

What percentage of instacart's business is tied to Whole Foods?

nojvek 9y ago

I quite like wholefoods. Now that Amazon will own it I feel less likely to support it. Amazon is a cut throat profit making machine at the expense of human exploitation. Wholefoods felt like the little guy who was trying to do things differently from mainstream supermarkets.

chrisper 9y ago
By that reasoning you would also have to stop visiting any website that uses AWS. I think that would mean you'd have to stop using the Internet entirely.
- aylmao 9y ago
  Are you implying that it's unreasonable for him to dislike Amazon for its labour practices if he's an internet user? That doesn't make any sense.
  - chrisper 9y ago
    No. I tried to say that if he wants to avoid things to stop supporting Amazon, then he will have a hard time. A similar case would be Nestle, since they own so many products.
- decebalus1 9y ago
  Wow! Overstatement of the day.
- intopieces 9y ago
  Purity tests / "all or nothing" thinking is reductive. Everyone picks their battles. Ethical consumption is not possible in the light of a global economy.
- konspence 9y ago
  Companies that use AWS are not owned by Amazon. WFM is. There is a big difference there.

panooper 9y ago

Pretty good rundown of reactions and implications of this deal here: http://circulaat.com/main/amazon-to-acquire-whole-foods-in-137-billion-bet-on-groceries-2 http://circulaat.com/main/amazon-to-acquire-whole-foods-in-1...

harrisreynolds 9y ago

HUGE news in the grocery delivery space. Groceries are one of the few large markets that require some proximity to customers due to costs and spoilage. Each grocery store is a type of mini-distribution center for grocery products. Shipt and Instacart have succeeded to date because they use existing distribution channels and set up marketplaces for the "last-mile" of delivery. This is in contrast to Webvan in the early 2000's who tried to do grocery delivery by building their own distribution and failed spectacularly. Amazon has become an expert in distribution and logistics. But it is clear that using their current model doesn't generally work with groceries (RIP Webvan, 1998-2001). Bananas need to be treated much differently than books. So what does Amazon do? But Whole Foods!! A moderate sized grocery store with a significant national footprint and lots of higher income customers. Now they instantly have a pre-built distribution channel that is already optimized for the grocery business (which again is much different than non-perishable consumer goods etc). Things definitely just got interesting in this space!! I still believe that Instacart and Shipt can succeed, but they need to maintain a laser focus on making their shoppers and customers happy! And grow as fast as possible while Amazon digests Whole Foods! [Note: I was the early CTO for Shipt responsible for building their grocery delivery platform and initial engineering team. Go Shipt!]

FLUX-YOU 9y ago
> I still believe that Instacart and Shipt can succeed Amazon could just buy Shipt and/or Instacart as well, barring FTC intervention. I'm not sure what B2B partners Shipt has, but I know they have a mobile app. Joining the mobile app to Amazon would give Shipt a boost and Amazon a start, I'd imagine. [I worked with one of Shipt's mobile developers at a previous position. Go Shipt!]
- metalliqaz 9y ago
  Why buy them when they can crush them?
- kp1234321 9y ago
  Serious question: would it be beneficial for Amazon to buy out an existing grocery distribution company like Instacart when Amazon is already an expert at distribution?

awinter-py 9y ago

ugh. In 1966 the supreme court forced the 3rd largest grocery chain in LA to divest the 6th-largest (which they bought in 1960). https://en.wikipedia.org/wiki/Vons https://en.wikipedia.org/wiki/Vons

psadri 9y ago

What will happen to Instacart?

danm07 9y ago

I wonder if instead of Amazon building out their own stores, they're going to use Whole Food's... unlikely but possibility is there if they do it well.

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tonychu 9y ago

Whole Foods market share will continue to increase with rising homosexual and gender confused culture.

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guiomie 9y ago

"The transaction also may help Amazon sideline Instacart Inc., a startup that has delivered grocery orders from Whole Foods stores in more than 20 states and Washington, D.C." ... I wonder how this will play. Is Instacart's business threaten by losing Whole Food as a client?

pfarnsworth 9y ago

What about Instacart? They had a sweet deal, if it continues then it means Amazon will buy them. If it gets cancelled it means Instacart is fucked.

jarjoura 9y ago

This might just be a strategic move to block Instacart as every WF I've been to recently had created an entire checkout section just for Instacart.

magic_beans 9y ago
Whoa, really? I've never seen this in New York.
- sethhochberg 9y ago
  Are you upstate? In the stores I've used around NYC, the Instacart presence in WF is huge. Branded coolers by the doors for deliveries waiting to go out and everything.

justinzollars 9y ago

Amazon's Global conquest continues.

subhsandhu1 9y ago

http://songspk.desilyrics.in/ http://songspk.desilyrics.in/

Robotbeat 9y ago

I'm from the Twin Cities in Minnesota which has tons of co-op grocery stores. They're successful and growing with cheaper prices than Whole Foods and much more progressive values (as well as giving regular folk an ownership stake in a crucial community institution). Whole Foods seemed to me to be just a poor copy of cooperative grocers. I'm surprised no one else has mentioned that in the comments here. I'm not shedding any tears for Whole Foods' "culture" now that they've been bought by Amazon. They were always a sort of sham-progressive company. In the words of Portlandia, "Whole Foods is CORPORATE." I suppose if you're going to be corporate, might as well go full Amazon. They do it very well.

trophycase 9y ago
Seward Co-op is literally my standard for grocery store. I always laugh at stuff like Whole Foods and Trader Joe's because, like you said, they are sham-progressive in every sense IMO.
- HillaryBriss 9y ago
  interesting. i never thought of Trader Joes as progressive. do they try to market themselves that way?

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Tokkemon 9y ago

Just add it to the list of reasons to avoid Amazon.

ShakataGaNai 9y ago

The old joke is that it isn't "Whole Foods" but "Whole Paycheck" because of how expensive they are. I wonder how that will change with Amazon's typically price cutting ways. The two seem somewhat at odds with each other.

delaaxe 9y ago

If there's ever going to be a world government, it's probably going to be Amazon.

wavefunction 9y ago

I wouldn't say obviously. From my perspective Obamacare is fascist even as I support it compared to the alternatives save single-payer national healthcare. What other ideology than fascism best describes government coercion of its citizens to engage in business relationships with the insurance companies to ensure their profits remain at certain levels?

jhall1468 9y ago
It's not to ensure their profits remain at certain levels, the profits are capped, not floored. The reason for this particular market is because health care costs in this country have gone out of control, and a major factor in that was people without insurance not paying bills, resulting in higher costs. That's not facist simply because you don't like it.
- wavefunction 9y ago
  I specifically said I like Obamacare more than any alternative other than single payer. And the profits are guaranteed by the individual mandate on young people.
  - jhall1468 9y ago
    You also said it's facist which is wrong. And the profits are not guaranteed by the individual mandate, ALL that's guaranteeing is a slow-down in healthcare costs that are spiraling out of control. Young people use healthcare. Everyone uses healthcare. When it goes unpaid, those of us that have insurance pay for those that don't. I'd rather have single payer too. But that doesn't make an "okay" alternative to it facist.
    - cholantesh 9y ago
      Nit: Why do you keep misspelling fascist?
burkaman 9y ago
I agree with Mackey, I don't have a good word for it. Fascism is not a good word for it, it means "an authoritarian and nationalistic right-wing system of government and social organization." This usually results in government control of industry, but that's not the defining feature of the ideology.

logingone 9y ago

Bezos will then start putting pressure on farmers. I don't know how these things work in the states, but the dairy industry would be the prime example in the UK.

snowman311 9y ago

AmazonFresh is an expensive service. The team is searching for routes to dominate the high-end grocery market (worth billions) before launching into the worldwide grocery market (worth hundreds of billions). AmazonFresh customers and Whole Foods customers value convenience and quality. They are much less price sensitive than most. Whole Foods has millions of customers. Amazon will surely be advertising AmazonFresh or some re-branded form of it - such as "Whole Foods Direct" - to Whole Foods customers. Do Whole Foods turn into AmazonFresh warehouses? Possibly, but it's unclear how the two business will eventually integrate. It's also possible that Instacart gets acquired by Amazon, but for the most part I see them getting screwed in this deal. Instacart's business development deal is like bringing a knife to a bomb-fight. The other major value this deal brings to Amazon is the industry-specific knowledge that the Whole Foods team brings. As a frequent East Coast, Whole Foods shopper, I am always amazed to see how much of their food comes from the West Coast/all over the world. I think the execs of AmazonFresh, who are mainly HomeGrocer/Webvan execs, appreciate the complicated logistics of doing the businesses. Amazon will be able to combine its software engineering knowledge/logistics knowledge with Whole Foods' expertise at creating an amazing grocery-shopping experience.

20years 9y ago

Does anyone else think that this purchase is largely in part so they can get AmazonFresh in a lot more places quickly? In my area where there is a big college campus, they have been hiring for AmazonFresh devs for over a year. We have no AmazonFresh here but we do have a Whole Foods.

kevinsundar 9y ago
Are we talking about SLO haha?
- 20years 9y ago
  Yes :)

lucb1e 9y ago

Since the article doesn't mention it, Whole Foods is apparently: > an American supermarket chain exclusively featuring foods without artificial preservatives, colors, flavors, sweeteners, and hydrogenated fats. I was waiting for this to appear (a common grocery store with seen-as-healthy stuff) but it already exists. TIL.

neonbat 9y ago

i've been helping my friend with his channel and we were pitching for amazon to buy whole foods a few months ago: https://youtu.be/fvZ8mGZZins https://youtu.be/fvZ8mGZZins

yuhong 9y ago

I wonder what happens to Whole Foods business code of conduct, including the “Online Forums” approval requirement I dislike.

msoad 9y ago

This is very bad news for InstaCart. I know most of InstaCart orders are WholeFoods and CostCo

karangoeluw 9y ago
How do you know that?

gigatexal 9y ago

Well this is a huge exit for WholeFoods which was seeing fewer and fewer people enter it's stores and increased competition from value grocers introducing organic foods. A number of articles asked if WholeFoods had a future in this new environment. As for Amazon, I see this more as a real-estate play to help them further their new push into grocery and the no-checkout process.

synaesthesisx 9y ago

Anyone know if they'll pilot Amazon Go approach at some of these stores? I don't think it's nearly ready for scale but could see it working out for certain locations...

tanilama 9y ago

Well, if successful, it will be a great leap forward for Amazon to advance its grocery vision. Maybe some kinda deal will be given to Prime members? Amazon Go Wholefoods? For the employees, it is neutral, if the company keeps underperforming Amazon will surely do something about it.

coolziro 9y ago

collinmanderson 9y ago

I love the Windows Updates restart warning in the video. :)

bsder 9y ago

People are also forgetting that CEO Mackey was about to get ousted or his wings significantly clipped. I feel this is more Mackey cashing out than anything else. Whole Foods is about to change a lot and quickly.

bogomipz 9y ago

Interesting so they are looking to take on Costco in the organic grocery market then: http://www.seattletimes.com/business/retail/costco-becomes-largest-organic-grocer-analysts-say/ http://www.seattletimes.com/business/retail/costco-becomes-l... I'm surprised the article didn't mention this.

joveian 9y ago

One thing I haven't seen mentioned here yet is that I wonder if Amazon intends to sell on their regular online store some of the non-perishable items that Whole Foods sells. Currently, Amazon is not usually competitive vs. VitaCost, Lucky Vitamin, and Swanson Health. I didn't realize until checking just now that VitaCost is owned by Kroger.

nfriedly 9y ago

Bezos: "Alexa, buy me something from whole foods" Alexa: "Buying Whole Foods" Bezos: "Shit"

niyazpk 9y ago
Credit(?): https://twitter.com/ChicagoPhotoSho/status/875708981511163905 https://twitter.com/ChicagoPhotoSho/status/87570898151116390...
- IAmGraydon 9y ago
  Nice catch. Plagiarizing for upvotes is rather sad.
  - ransom1538 9y ago
    So is public shaming.
- nfriedly 9y ago
  Sorry, my wife sent it to me, didn't realize there was a different source. Too late to edit now :( Although the first reply there says the original source was https://mobile.twitter.com/JesalTV/status/875705460313255936 https://mobile.twitter.com/JesalTV/status/875705460313255936 FWIW

good_vibes 9y ago

I have a job interview with Amazon next week. Wish me luck, I'll be likely doing entry level work but I hope I can keep working on websites for clients (have 2 currently), keep learning data structures/algorithms, and build a personal project. All this to one day get hired by Amazon for UX or web developer.

KeenanFeldspar 9y ago

I'm surprised they're keeping Mackey after he did this: https://dealbook.nytimes.com/2007/07/12/whole-foods-ceo-posted-online-attacks-about-wild-oats/ https://dealbook.nytimes.com/2007/07/12/whole-foods-ceo-post... There was an SEC probe https://www.forbes.com/2007/07/16/whole-foods-sec-markets-equity-cx_jl_0716markets30.html https://www.forbes.com/2007/07/16/whole-foods-sec-markets-eq...

rollingpebbles 9y ago

WF has been struggling because they helped paved the way for mainstreaming of organic, sustainable, etc. They couldn't pivot really and everyone else was undercutting their high prices and they've been unable to increase profitable foot-traffic to stay alive. Amazon could basically use WF as a laboratory for deploying Amazon Go without having to build grocery logistics from scratch. Hope it works out.

codecamper 9y ago

This is all Marc Andreessen's fault. If we had just left it at Gopher, none of this would have happened!

trophycase 9y ago

Now, with a prime membership I'll never need to leave my house!

supercoder 9y ago
The American dream

ransom1538 9y ago

Race to the bottom! Amazon checklist: 1) Import cheap Chinese goods, 2) avoid sales tax, 3) destroy the environment (china), 4) destroy brick and mortar stores, 5) destroy small/medium business. === PROFIT!

gryz 9y ago

Liked a joke from by spouse: Mr. Bezos: - Alexa, buy me something from Whole Foods Alexa: - Good. Buying Whole Foods.

mickrussom 9y ago

I've noticed that comments here that are critical of Bezos gets met with downvoting. Sad. Why Microsoft got the 3rd degree and Amazon gets a pass is beyond me. I guess that large unethical companies like Amazon can use AIs to police sentiments about them and do the needful. We should start looking for anti AI mechanisms in discourse as well as work to ensure paid sockpuppeting and gas lighting is not going on. The truth is going to be harder to get at these days.