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Amazon Said to Plan Cuts to Shed Whole Foods' Pricey Image
- gboudrias 9y agoAaaaand they ruined it.
- epmatsw 9y agoWhy would you buy Whole Foods to compete with Walmart? Seems like totally different branding and target markets...
- WalterSear 9y agoBecause you just wanted to pick up a bricks and mortar chain to populate with your own stores.
- epmatsw 9y agoSeems like there's other brands that you could acquire if that was the goal (Safeway, Ingles, Publix, Kroger, etc), but maybe those are too big? Anyways, just seems like a waste to trash the Whole Foods brand when I imagine that's a pretty solid chunk of their value.
- rainbowmverse 9y agoDoes Ingles have any locations outside the southeast? I'm surprised to see it mentioned here.
- epmatsw 9y agoThat's a good question actually. I was just thinking of nearby grocery stores off the top of my head.
- WalterSear 9y agoIs it necessarily a waste, or perhaps a gamble of appealing to different type of consumer? What if Whole Food's brand cachet means as much, or more, to people who can't afford to shop there? In some circles 'Whole Foods shopper' is a denigration, drenched in jealousy. There may be a demographic that perceive Whole Food brand aspirationally, who will be brought in by reducing quality and prices.
- meddlepal 9y agoSounds like a smart move if they can keep the perceived brand identity for quality goods. WF has a lot of unnecessary overhead.
- pavlov 9y agoFractional Foods?
- Animats 9y ago"Amazon expects to reduce headcount and change inventory to lower prices and make Whole Foods competitive with Wal-Mart Stores Inc. and other big-box retailers." That's a huge change. You go into Whole Foods, and it's mostly good-looking, thin people, not the wide loads and screaming kids of Wal-Mart. If Amazon wasn't looking to go upscale and high-margin, what did they buy Whole Foods for?
- icebraining 9y agoBecause it was cheaper?
- RubenSandwich 9y agoIt does make sense because that is Amazon's modus operandi. They are the Walmart of online shopping; one place for everything and it's cheap too. They don't really associate themselves with quality or try to win over those brands, in fact luxury brands have fled from Amazon for a while now. (See: https://qz.com/807419/is-it-even-possible-to-sell-luxury-on-amazon/ https://qz.com/807419/is-it-even-possible-to-sell-luxury-on-..., among other articles that you can find from googling.) But I agree that it's very strange that Amazon is buying Whole Foods, which is a luxury grocery store, to then try to replicate Walmart. This will just alienate the customer base and drive them to Traders Joes, Coops, etc.
- Finnucane 9y agoThey don't really care about the customer base. They figure their own customer base is bigger than anybody else's already. They wanted an in on the grocery retail business, and WF was a way in. I guess we will have to just wait and see what happens. Normally when one company buys another, they say "nothing will change," which means that in six months all trace of the thing will be gone. Personally, I'm not looking forward to the change. One of the things I like about WF is that they're pretty good about stocking products from local/regional producers. And they have a pretty good cheese section. I'm betting Amazon will not care about these things.
- throwaway40483 9y ago> They are the Walmart of online shopping; What are you basing this on? Amazon (Prime) customers are way more wealthier than Walmart customers: https://fortunedotcom.files.wordpress.com/2015/12/screen-shot-2015-12-03-at-2-30-59-pm.png https://fortunedotcom.files.wordpress.com/2015/12/screen-sho...
- cholantesh 9y ago>Amazon expects to reduce headcount and change inventory to lower prices and make Whole Foods competitive with Wal-Mart Stores Inc. and other big-box retailers, according to a person with knowledge of the company’s grocery plans. That inventory will have to include GMO foods if they are serious about competing in that space.
- naaaaak 9y agoNormies will soon be walking around WF, asking what "quin-oh-ah" and gluten-free are.
- homosaphien 9y agogo back to 4chan
- homosaphien 9y agogo back to 4chan
- nickthemagicman 9y agoJesus I have a feeling Amazon is a more ruthless Wal Mart with Automation and way better tech. I know I'm buying their stock.
- Spooky23 9y agoSounds like what happens when Oracle buys tech companies.
- walshemj 9y agoIsn't that like buying Marks and Spencer's or Waitrose and saying we are going to make it like Aldi or Liddle. If that's Amazons view time to short amazon
- golemotron 9y agoIt might be just be the right move for the times. Increasingly, Whole Foods has been coming across as pretentious. The last time I went in one I was confronted by an entire freezer case of renaissance mermaids basking in flowers on pizza boxes, each signaling virtue for some ecological or pseudo-science health idea.
- funnyfacts365 9y agoLidl
- nine_k 9y agoIt might be a PR stunt to provoke exactly that :) If Amazon is not going to do anything crazy with Whole Foods, it's time to long more Amazon.
- edsheeran 9y agoPersonally, I prefer Trader Joe's to WF. TJ by design stocks FEWER SKUs, has human (humane) cashiers that can engage you in conversation and know how to properly bag items. It's the closest thing to European street stands, excluding of course the American farmer's market which can be so much more expensive.
- oliv__ 9y agoEvery time I get some vegetables at Whole Foods, some cashier will look at an item confused and ask "What's this?". Um...Celery... This has never happened to me at Trader Joe's.
- GCA10 9y agoHmmn. The entire story is attributed to "a person with knowledge of the company’s grocery plans." We aren't told whether this is a senior Amazon executive or an automation-services vendor who sat in on a couple meetings with a mid-level Amazon team and thinks he/she has the whole story. Everything in the piece sounds like one path that Amazon could take. But Amazon also has a long history of exploring a lot of ideas before deciding where it will commit big resources. Hearing the same scenario from multiple sources would have been helpful.
- jameskegel 9y agoThis is pretty common as a PR move actually. Any backlash on stock price or public opinion and they get to rejigger the strategy for free and call the claims "unfounded".
- dboreham 9y agoYou need to know that "person with knowledge..." is code for "Jeff Bezos".
- linsomniac 9y agoI would love to see some more local Amazon presence, considering how much use I get out of Amazon. But the Venn diagram of things I get from Amazon and things they stock at Whole Foods does not intersect. I would like to see some local Amazon presence, but coming into Whole Foods and trying to make it competitive with WalMart seems like a huge mistake. I mean, look at how well WalMart's attempts to move into Amazon's online space have gone...
- tonylo 9y agoThose who don't understand why "Amazon is buying Whole Foods to compete with Wal-Mart" should read this: http://loupventures.com/amazon-is-building-the-future-of-retail-by-rebuilding-the-past/ http://loupventures.com/amazon-is-building-the-future-of-ret... Amazon are not competing with just Wal-Mart. They want to redefine and compete in all categories of retail.
- KirinDave 9y agoThis plan did not go well for Fresh and Easy.
- tuna-piano 9y agoMaybe Amazon's competitive edge is that its investors don't demand current profits, like the shareholders do of every other company. They can price to break even or lose money. I think I recall other retailers complaining about competing with a company that doesn't need to make a profit. It does sound difficult, and it is at least a bit quizzical that Amazon gets away with it. Then again, their strategy does seem to have worked.
- devdas 9y agohttp://media.corporate-ir.net/media_files/irol/97/97664/reports/Shareholderletter97.pdf http://media.corporate-ir.net/media_files/irol/97/97664/repo...
- 6stringmerc 9y agoWell, here's 37 lbs of free advice, Bezos & Co: Change the name to "Half Paycheck" to at least be self-aware enough to know why the customers have left for Central Market, Trader Joe's, and Sprouts. Whole Foods became a parody of itself. Sure, it took about 10 years, but who are you kidding - the CEO and Board just sold out to Amazon. I wonder if beard care products will still be provided for free to employees in all stores...
- nunez 9y agoThe beard care thing tipped me off. The WORST bath salt I've ever gotten came from Whole Foods. It was this $25 thing that was super small and smelled weird. The best salt? $5 Dr Teals from Walmart: the land of "wide loads and screaming kids."
- mc32 9y agoI'd like that to mean they will keep the same kind of inventory -quality of their stock as well as their commitment to sustainability and ethics while bringing down prices via partnerships and economies of scale rather than by sourcing "cheaper goods" a la Wal*Mart which achieved that goal by sourcing unethically from overseas and dropping local producers. If there is change in quality of product (and I don't mean their new age medicine stuff) I'll buy elsewhere. The other day people were concerned WalMart might bring down Bonobos to their level --I'm concerned that Amazon might bring Whole Foods down to their level instead.
- JCzynski 9y agoWhat is the value of Whole Foods without its pricy image?
- pasbesoin 9y agoNot a regular Whole Foods customer, and this is off the cuff, but my distinct impression with regard to how this will impact Whole Foods' "line" (i.e "normal") workers, is: Welcome to your McJob. When I do go into Whole Foods, the staff are always attentive and seem to be in relatively good moods and well treated. I am sorry for the negative impact I expect this will have on them. I don't have a Whole Foods close to me. And, while some items there can be oddly cheaper, and they further offer a "case" discount that is quite significant [1], it can indeed be "whole paycheck" for other items and if you're not comparison shopping. Which, for me, mostly means comparing with my local instance of a regional supermarket chain. Not as upscale as Whole Foods, but plenty ok, and a union shop, where the employees seem to be treated all right. (I know a few of them. I've heard at least one story about how the union had the back of a worker I know to be one of their better ones, when some new management douche tried to screw him over.) Amazon... Well, my overall impression of Amazon, is that it's a meat grinder, unless you are one of its "blessed" employees. We'll see whether they can manage to run contrary to that, in absorbing Whole Foods. 1) While a friend was in hospice, all she could eat reliably was yogurt, and she particularly liked one line that the facility she was in didn't carry. I stopped by Whole Foods and grabbed a bunch, of a variety of flavors -- whatever looked promising. At checkout, the cashier looked at it and gave me the case discount, without my asking. What should have been a $30+ total turned into... was it $10, or $15? I had to ask them to repeat the total, as it was nowhere near my mental math approximation. Separately, I like Amy's chili. For a long time, Whole Foods was the cheapest place for it -- even without the case discount. Sometimes, on the order of a dollar a can cheaper. On the other hand, some of their produce prices were double or more those of my local supermarket. Before getting into the whole "organic" question.
- peapicker 9y agoStarting to downvote all bloomberg articles because their ads stop my music on mobile when i try to read their articles. Not a new behavior but I'm sick of it.