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> My guess is that Amazon took one look at the books and saw that they could easily lower prices without suffering much in the way of profit loss. Well, I hope
by fragsworth 9y ago
> My guess is that Amazon took one look at the books and saw that they could easily lower prices without suffering much in the way of profit loss.
Well, I hope you're right, but I think you're wrong. Here's why:
Amazon wants to dominate the world of retail, and Whole Foods currently targets a specific and smaller demographic than "The World". Amazon needs to expand the demographic to reach everyone else. The way they do that is by removing most of the expensive things Whole Foods carries, and replacing them with cheap, less ethical alternatives.
This means we'll eventually lose a lot of the things Whole Foods carries. For a lot of vegan and ethical suppliers, Whole Foods is the vast majority of their sales, and they'll just be shut down.
- michaelchisari 9y agoAmazon paid 13.7 billion for Whole Foods, which has 470 stores. If their interest was in low quality, inexpensive supermarket locations, why wouldn't they purchase something like Publix, with its 1,154 stores, for a much cheaper price? Furthermore, if you want guaranteed ethical, organic and fair trade goods, Whole Foods was always more about branding than reality on that front, anyways. Their stuff is better than most supermarket chains, but the independent stores still have them beat by a far margin.
- iamnothere 9y agoPublix is actually employee-owned, so it may not have been possible to broker such a deal. (Your general point still stands though; there are lots of large chains out there, and many would likely welcome a large buyer.)
- sib 9y agoPublix, while it has over 1,100 stores, operates them all in only seven states in the southeast US. Whole Foods, although relatively small, has a nearly national footprint.
- btian 9y agoI don't know Amazon's plans but what you're saying don't make much sense to me. If Amazon wants to target low end grocery retail, why do they acquire Whole Foods? It makes business sense for them to let WFM stay high end, and start a Amazon Basics store to go down market.