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Can someone explain to me how this could be considered "consolidation"? Is amazon buying multiple grocery store chains? The entire point of this article seems

Can someone explain to me how this could be considered "consolidation"? Is amazon buying multiple grocery store chains? The entire point of this article seems extremely far fetched.

wbl 9y ago
Amazon had a grocery delivery service and is purchasing a grocery store.
dragonwriter 9y ago
Amazon is already in the grocery retail business. Whole Foods is in the grocery retail business. The consolidation is kind of obvious.
- nightski 9y ago
  They have 1 store iirc, and it's not even ready for prime time yet (the automated one). I'm not sure I'd call that industry consolidation... EDIT: Is delivery even relevant to the topic at hand? It's basically a completely different type of business.
  - dragonwriter 9y ago
    Amazon's grocery retail is not limited to, or even primarily conducted via, the one brick and mortar store. EDIT: > EDIT: Is delivery even relevant to the topic at hand? It's basically a completely different type of business. I think it's pretty clear that people do substitute between in-person and online retail based on price and other competitive factors, so they aren't isolated, unrelated businesses.
    - snuxoll 9y ago
      Hell, Albrrtson's/Safeway offers delivery and Kroger brands plus WalMart have pickup options - that's a large majority of grocery brand in the US.
  - sjm-lbm 9y ago
    It's not just about the physical store - Amazon sells quite a few grocery products online.
  - skinnymuch 9y ago
    They do grocery delivery. In various ways, namely Pantry and Fresh. But I essentially do some grocery shopping through Subscribe & Save. We don't know how big of a share they have in groceries sold. The one test retail store isn't the issue here.
  - deleted 9y ago
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- deleted 9y ago
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- tdb7893 9y ago
  It's kinda weird because they both just occupy small niches in the business. My guess is that even if they combine they won't occupy a huge part of the market.
sib 9y ago
Both are in the grocery business. However, both are effectively "bit players" in the business: Whole Foods has about 1.7% market share, while Amazon has 0.8%. For comparison, Walmart, plus its subsidiary Sam's Club, has over 20% market share.[1] Generally, in the US, competition inquiries focus on the Herfindahl-Hirschman Index (HHI) for a quantitative evaluation of industry concentration (https://en.wikipedia.org/wiki/Herfindahl_index https://en.wikipedia.org/wiki/Herfindahl_index). A potential combination with market shares such as Amazon's and Whole Foods' usually won't be seen as dangerous using that metric. There are other concerns as well, of course, but the HHI is a critical one. [1] https://www.statista.com/statistics/240481/food-market-share-of-the-leading-food-retailers-of-north-america/ https://www.statista.com/statistics/240481/food-market-share...

Can someone explain to me how this could be considered "consolidation"? Is amazon buying multiple grocery store chains? The entire point of this article seems extremely far fetched.

wbl 9y ago

Amazon had a grocery delivery service and is purchasing a grocery store.

dragonwriter 9y ago

Amazon is already in the grocery retail business. Whole Foods is in the grocery retail business. The consolidation is kind of obvious.

nightski 9y ago
They have 1 store iirc, and it's not even ready for prime time yet (the automated one). I'm not sure I'd call that industry consolidation... EDIT: Is delivery even relevant to the topic at hand? It's basically a completely different type of business.
- dragonwriter 9y ago
  Amazon's grocery retail is not limited to, or even primarily conducted via, the one brick and mortar store. EDIT: > EDIT: Is delivery even relevant to the topic at hand? It's basically a completely different type of business. I think it's pretty clear that people do substitute between in-person and online retail based on price and other competitive factors, so they aren't isolated, unrelated businesses.
  - snuxoll 9y ago
    Hell, Albrrtson's/Safeway offers delivery and Kroger brands plus WalMart have pickup options - that's a large majority of grocery brand in the US.
- sjm-lbm 9y ago
  It's not just about the physical store - Amazon sells quite a few grocery products online.
- skinnymuch 9y ago
  They do grocery delivery. In various ways, namely Pantry and Fresh. But I essentially do some grocery shopping through Subscribe & Save. We don't know how big of a share they have in groceries sold. The one test retail store isn't the issue here.
- deleted 9y ago
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deleted 9y ago
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tdb7893 9y ago
It's kinda weird because they both just occupy small niches in the business. My guess is that even if they combine they won't occupy a huge part of the market.

sib 9y ago

Both are in the grocery business. However, both are effectively "bit players" in the business: Whole Foods has about 1.7% market share, while Amazon has 0.8%. For comparison, Walmart, plus its subsidiary Sam's Club, has over 20% market share.[1] Generally, in the US, competition inquiries focus on the Herfindahl-Hirschman Index (HHI) for a quantitative evaluation of industry concentration (https://en.wikipedia.org/wiki/Herfindahl_index https://en.wikipedia.org/wiki/Herfindahl_index). A potential combination with market shares such as Amazon's and Whole Foods' usually won't be seen as dangerous using that metric. There are other concerns as well, of course, but the HHI is a critical one. [1] https://www.statista.com/statistics/240481/food-market-share-of-the-leading-food-retailers-of-north-america/ https://www.statista.com/statistics/240481/food-market-share...