Amazon Plans Cuts to Shed Whole Foods' Pricey Image (bloomberg.com) 311
When Amazon completes its acquisition of Whole Foods Market, Chief Executive Officer Jeff Bezos will try to keep the grocer's reputation for premium fresh foods while cutting prices to shed its "Whole Paycheck" image. From a report: Amazon expects to reduce headcount and change inventory to lower prices and make Whole Foods competitive with Wal-Mart Stores and other big-box retailers, according to a person with knowledge of the company's grocery plans. That included potentially using technology to eliminate cashiers. Amazon, known for its competitive prices, is trying to attract more low- and middle-income shoppers with its grocery push. The Seattle-based company already offers discounted Amazon Prime memberships for people receiving government assistance and is part of a pilot program to deliver groceries to food-stamp recipients.
The Whole Paycheck Image is what sells... (Score:4, Interesting)
Re:The Whole Paycheck Image is what sells... (Score:5, Interesting)
There's a TV show in Britain called [slashdot.org]http://www.bbc.co.uk/food/prog... [bbc.co.uk] . They take a family and swap some of their expensive brands for generic articles (and disguise the packaging so they can't see). A lot of the time they actually prefer the cheaper stuff, at least when they don't know about it.
Re: (Score:3)
There's a TV show in Britain called [slashdot.org] http://www.bbc.co.uk/food/prog... [bbc.co.uk] . They take a family and swap some of their expensive brands for generic articles (and disguise the packaging so they can't see). A lot of the time they actually prefer the cheaper stuff, at least when they don't know about it.
and that is why marketeers invented branding.
Re:The Whole Paycheck Image is what sells... (Score:4, Insightful)
The cheaper stuff is often made with inferior quality ingredients and then loaded with more salt, sugar and fat to "improve" the taste. It can be tastier and less healthy for you. Taste and price are not the only criteria to consider when picking what to eat. For example, when reading the label on a store brand pack of chicken fingers, I found they contained 34g of sugar per serving, which was more than the ice cream desert in the next freezer.
From a quick glance at the show you linked, it looks like your summary of the show might be lacking, though, it's called "Eat well for less" and it may have a focus on finding good, inexpensive, and healthy food.
Re: (Score:2)
OK true story here, from just last week.
Here in Austin, we have a Whole Food's competitor run by HEB called Central Market. It's closer to my homestead, so I go there if I need something that a "Whole Foods" store would carry. I also shop at Trader Joe's Randal's and at Fiesta and other "Mexican" grocery stores (depending on price and my needs at the time).
Ok, so I was a Central Market the other day and I passed a couple looking at bacon. I had recently bought the best damn bacon I ever ate at Central Marke
Re: The Whole Paycheck Image is what sells... (Score:2)
This. I would rather buy local, fresh from the farm a couple miles down the road, pesticide and chemical-free, but not certified organic because the certification process is too damned expensive.
Re: (Score:2)
My car is like that. It's not exactly that he prefers the taste of the cheaper stuff, he just likes variety. If he hasn't eaten it for six months he will always go for it.
Re: (Score:2)
Yes, the effect you are talking about is real. But it's not the whole story. I think Whole Foods makes a lot of its money off of what I think of as the "Inverse-Cheese Shop Sketch" method.
Say you're just dashing in for a dozen eggs; you walk past the enormous cheese display and think to yourself, "That's a lot of cheese. I like cheese, but that's not what I'm here for." That's because while choice draws attention, too much choice actually dissuades people from buying. But just as you're thinking "chees
Re: (Score:2)
There are studies showing that people feel like they're getting a better quality product when they pay more for something,
That's why personal hygiene products (and clothes, and other gender-specific items) for women sometimes cost three times as much as they do for men.
Your average man looks at a stick of deodorant "A" and deodorant "B" and sees that "A" costs 20% less than "B" so he buys "A".
Your average woman looks at the female versions of "A" and "B" (which might be identical except for scent) and buys "B" because she assumes the higher price means a higher quality product.
Studies have shown when women's hygiene products
Allow local sellers (Score:3, Interesting)
just like on amazon.com, amazon should now allow local sellers to come and sell at Whole Foods stores! this may lead to competitive pricing and benefit whole food's reputation & business, farmers and consumers alike.
Oh (Score:5, Interesting)
They want to turn Whole Foods into Wegmans?
I'm... actually okay with that.
Carry on.
Re: (Score:2)
Re: (Score:2)
The excuse for me is "Wegmans is not open right now." The follow-up question is "Why are you going grocery shopping between 12AM and 6AM?"
Improve the back-end (Score:4, Insightful)
I expect the first thing Amazon will change is the back-end distribution system. This is something Amazon knows better than pretty much anyone else, especially for non-perishables, which is probably more than half the store.
Re: (Score:2)
Re:Improve the back-end (Score:4, Informative)
Perhaps the thing that Amazon is trying to do is getting the foodstamps from their employees, They see them getting all that free monies and they want that.
For their employees. Many times when people get a job at Walmart they are given food stamp and welfare forms during orientation.
These programs are a direct subsidy to these corporations, so they do not have to pay their employees a living wage.
So Whole Foods going from Whole Paycheck (Score:2)
Eliminate cashiers (Score:3, Insightful)
No. When I go to a physical establishment, I expect that experience to include one interaction with an employee. Self-checkout is the wrong solution to a problem retailers created: not having enough checkouts open. If you want me to do use self-checkout, thereby doing an employee's job, I want an employee discount. Stop pushing this on customers as if it's some miraculous reverse-ATM.
Re: (Score:3, Insightful)
Re: (Score:3)
OTOH, I avoid establishments that don't have self checkout. Even if there is no line at the checkout, I will always use the self-check because I can scan and bag my groceries faster than the register jockey. I don't go grocery shopping for the "social experience". My goal when grocery shopping is to exchange symbolic currency units for tangible goods as efficiently as possible, not to make small talk about the sports or the weather or comment on my food choices or donate a dollar to charity.
Sam's Club has taken it a step further; you simply scan items as you put them in the cart and when you are done you pay electronically and avoid the line completely. Upon leaving that scan a barcode on your phone, check the items listed and out you go. In most cases they don't even bother to do a thorough check after the first few items. If I ran security there I'd have them just look for big ticket items to ensure tehy aren't walking so as to make the whole experience as painless as possible.
Re:Eliminate cashiers (Score:5, Insightful)
When you spend 8 hours bagging other people's groceries you can get an employee discount.
When you spend 3 minutes bagging your own groceries you can get the enjoyment of faster check-out.
Re: (Score:2)
Re: (Score:2)
No, we don't bag our own groceries here in the US. It seems from my travels that this is a unique US thing.
Here, either the cashier bags the groceries as she scans them, or a second person (usually a teenager) bags them as the cashier sends them down the counter.
I think this might be influenced by the fact that Americans are usually buying huge amounts of food on each trip. Most of us make one grocery trip for our large families every week or two. And of course, we over-eat a lot. We tend to wheel a large s
Re: (Score:2)
When I go to a physical establishment, I expect that experience to include one interaction with an employee.
Personally I would prefer that interaction to be me asking "where is X" and them pointing it out to me, rather than the one where I watch them scan my items. The most expensive part of grocery shopping is not the food itself, nor the gas to get there, but my time. If self-checkout can save me 5 minutes, it's already a discount.
Re: (Score:2)
Horrible article - its just guessing with no facts (Score:5, Informative)
The article is click bait. As stated in the article, Amazon has not confirmed ANY of the assertions made in the article.
Re: (Score:2)
Amazon doesn't get Whole Foods (Score:2)
Price matters (Score:2)
This group doesn't intersect with WallMart shoppers, so why then would you want to compete with WallMart on price?
Because if Walmart offers good enough organic produce, price will win out. There seemingly are not enough Whole Foods customers who aren't willing to go elsewhere for their organic kale to keep the company afloat when they can get it from Costco or Kroger or yes even Walmart. Whole Foods had a niche when they were effectively the only ones selling organic foods. Now I can get that from nearly anywhere, often for a lot less money.
Re: (Score:2)
This group doesn't intersect with WallMart shoppers, so why then would you want to compete with WallMart on price?
Because if Walmart offers good enough organic produce, price will win out. There seemingly are not enough Whole Foods customers who aren't willing to go elsewhere for their organic kale to keep the company afloat when they can get it from Costco or Kroger or yes even Walmart. Whole Foods had a niche when they were effectively the only ones selling organic foods. Now I can get that from nearly anywhere, often for a lot less money.
WalMart tends to buy at the low end of the quality spectrum, mainly to keep prices down; at least that was the case a few years back when I talked to one of their suppliers who sold to most other grocery chains as well. There is nothing wrong with their food, just a lot of it is a cut below a major grocery chain's quality; that lets them keep prices low. The only exception I've seen is the vegetables which tend to be perfectly fine; the meats and fish OTOH are often barely edible in comparison.
Walmart doesn't need all their shoppers (Score:3)
WalMart tends to buy at the low end of the quality spectrum, mainly to keep prices down; at least that was the case a few years back when I talked to one of their suppliers who sold to most other grocery chains as well. There is nothing wrong with their food, just a lot of it is a cut below a major grocery chain's quality; that lets them keep prices low. The only exception I've seen is the vegetables which tend to be perfectly fine; the meats and fish OTOH are often barely edible in comparison.
I don't disagree but remember that Walmart doesn't have to capture all of Whole Foods customers to drive them out of business. They just need to get enough to push them into unprofitability like they've done with so many other retailers. The problem Whole Foods is facing is simply increased competition and they don't have the cost structure right now to deal with the threat adequately. Most people simply aren't that loyal to Whole Foods especially since they no longer have a niche all to themselves.
Re: (Score:2)
er... (Score:2)
...and the supermarket business just shit themselves.
So which will blink first:
- will the giant megacorp which seems to run magically profit-free manage to outcompete everyone in an industry where margins are already nearly zero?
- or will the high-capital, high-labor, complex grocery business finally be the anchor that drags amazon to a stop? Certainly Amazon's approach has revolutionized the sale of general consumer products but entering the world of products whose value ticks away (quickly) with the cloc
Canary in the coal mine (Score:2, Interesting)
As these ever so slightly upscale places g
Re: (Score:3)
Its still funny that that myth persists, the whole no pesticides in organic food. Its just flat out wrong. All farmers use pesticides, organic or not
Re: (Score:3)
Whole Paycheck (Score:2)
Why didn't Amazon buy Kroger? They have much larger market penetration. Amazon is sitting nearly unlimited cash. Whole Foods is a place where upper-middle-class people can waste their money on goods that may, or may not, be worth the cost. I watched South Park and I have shopped at Wholefoods. They portrayed Wholefoods exactly as it is. Overpriced, agenda driven and snooty.
Re: (Score:2)
Re: (Score:2)
Kroger is both a brand and a holding company. It's the third largest retailer in the world and third largest employer in the US. It's the largest grocer and second largest retailer after Walmart in the US.
When they takeover a chain (which they do a lot), they don't tend to change the name. If you've shopped at Ralph's, Fry's, QFC, FredMeyer, Food4Less, Foods Co. or Harris Teeter (all these are in coastal states), you've shopped Kroger. They have a dozen other chains they run too (Baker's, City Market, Dillo
Oh oh.... (Score:2)
Posh people won't like it ;-)
I already warned about this (Score:2)
Duh (Score:2)
Re: (Score:3)
bye bye "quality" food (Score:2)
Comment removed (Score:3)
Business Opportunity (Score:2)
I despise self-checkout. Amazon basically ensured I'll be avoiding Whole Foods from now on. That, and the cheapening of the inventory is creating a business opportunity for the kind of company that Whole Foods used to be, correcting the mistakes that Whole Foods made along the way.
I propose Bellerophon [wikipedia.org] Foods.
Re: (Score:2)
Computers taking American jobs.
Computers area not even citizens.
Re: (Score:2)
Does self-checkout actually work? (Score:2)
My grocery store doesn't have self-checkout. A number of years ago one of the stores tried it. The machines didn't work right. Apparently it wasn't just me, because they quit offering it and none of the other stores around here tried it.
This was years ago, so maybe the tech wasn't ready, or maybe they just tried to cheap out and got crappy machines. Either way, it left a bad impression on me, and I'm not eager to try it again.
Re: (Score:3)
Re:That's why people shop there (Score:5, Insightful)
just because you have money doesnt make you decent (as your post proves)
Re: (Score:3, Insightful)
Re: (Score:2)
"smug" people really arent any better than "trash"
If you are concerned about being "better" or "worse", then I suppose that matters.
I'm not defending the AC's terrible attitude, but he does have a point. I mean, does Target exist for any reason other than for a few pennies more you can shop at a store that is like Walmart except clean, organized, and with actual open lanes at checkout? It's not really the lower class people are avoiding, but lower class people are going to be more price sensitive in general and so will be at Walmart rather than Target (or,
Re: (Score:2)
I mean, does Target exist for any reason other than for a few pennies more you can shop at a store that is like Walmart except clean, organized, and with actual open lanes at checkout?
Well, in my area, due to their predatory practices, the locals voted against allowing a Wall-Mart within the city, so they're a bit out in the boonies. There is a Target though, and it seems like a decent enough place. I wouldn't go there for actual groceries, but there sell quite a few things that a grocery store isn't going to have, since they really only have a little overlap.
Re:That's why people shop there (Score:5, Insightful)
There's unfortunately little you can do. No matter where you go, the trash is shopping there.
Re: (Score:2)
Re: (Score:2, Interesting)
You would hate me when I go to Whole Foods.
I do metal working on the weekends and there is a WF that is about 15 minutes away from me. I've gone in there with steel dust and Mil-Spec on me and picked up a sandwich or a tub of soup. I go and get it there because there sandwiches are really good and the same price as one from Subway.
Also not everyone who shops at Wal-Mart is trash. There are people who are barley getting by and shop at Wal-Mart because they cannot afford to drop their entire paycheck on groce
Re: (Score:2)
You would hate me when I go to Whole Foods.
On, no, you're just right. You see, you're local color. All part of the theme park shopping experience.
Re: (Score:2)
MAYBE try not injecting partisan politics into everything, especially when statistically speaking you are wrong
Re: (Score:3)
Re: (Score:2)
Many people shop there because it is convenient to where they live.
Re: (Score:2)
Um, Trader Joes is primarily a packaged-goods store. It's the definition of junk. Yes, you can still "do the edges" like at any grocery store, but the edges are small at most of them.
Re: (Score:3)
Re: (Score:2)
I vote for BJs. Always
BJs all closed down in our area. They're not really a general purpose grocery store though, they're more like a Costco with less variety in inventory.
Change or die (Score:3)
Why am I not surprised the first action upon acquiring a new company is to fire everybody who might know how to run it?
Whole Foods has been in considerable trouble recently so it's pretty clear the folks in charge of Whole foods did not know how to run it. The company found an untapped niche where they were a first mover. The competition has significantly caught up and so it's harder to get away with charging for $6 "asparagus water".
And yes there will be headcount cuts, at least at first. Almost any time two companies merge there are some redundant positions. Furthermore Whole Foods has a cost structure that is not wor
Re: (Score:2)
Re: (Score:2)
No, Whole Foods has been in a bit of a financial pickle for a long time. They are down 50% off their peak in 2013. Their revenue growth has been steady, but their operating income flat or down. They have serious competition in the premium grocery store space now - competition with better logistics and lower overhead. People have been waiting for either a buyout, merger, acquisition, or a death spiral, and whaddayaknow?
Is Amazon profitable yet? (Score:2)
Re: (Score:2, Informative)
Re: Is Amazon profitable yet? (Score:5, Insightful)
Re: (Score:3)
Maybe I'm wrong (and this is quite possible--after all, HL Mencken said that no one ever went broke underestimating the intelligence of Americans), but it seems to me that with Amazon turning itself into a crappy online flea market full of counterfeit merchandise, B&M isn't going anywhere anytime soon.
That said, Amazon has competition from other online sellers, including even Walmart.com, and of course Ebay, but also countless other smaller retailers that usually are more specialized, so B&M is goin
Re: Is Amazon profitable yet? (Score:4, Interesting)
They're vitamins- an almost entirely unregulated market offering a product that has no health benefits for the vast, vast majority of people. Its modern day snake oil to begin with. How the hell do you counterfeit what's already fake?
Re: (Score:3)
Yeh, this is really sad - WholeFoods for all that it is pricy as hell also sells a bunch of really good quality things that you can't easily get elsewhere. Turning it into yet another Safeway is a real shame.
Re:New flash... (Score:5, Informative)
Yeh, this is really sad - WholeFoods for all that it is pricy as hell also sells a bunch of really good quality things that you can't easily get elsewhere. Turning it into yet another Safeway is a real shame.
I agree, but Amazon is a logistics company masquerading as a retail operations; similar to Walmart in terms of focus although not quite as cutthroat from what I've seen. If Amazon can maintain quality while reducing supply chain costs and expanding the customer base to get greater economies of scale tehy could turn Whole Foods into a serious competitor.
Re:New flash... (Score:4, Insightful)
If Amazon can maintain quality while reducing supply chain costs and expanding the customer base to get greater economies of scale tehy could turn Whole Foods into a serious competitor.
If it was a privately held company with a, "Quality is Job #1" slogan they actually believe in, that could happen.
In this case, however - where this was an investment opportunity/buyout by a large investor - I wouldn't hold your breath. Modern, large-scale business theory has a relatively new corollary they believe in: "Good Enough" trumps "Best" to most consumers. In several years, when Amazon's profits growth matures (and it always does), and stockholders start looking for new ways to keep stock prices going up (they always do), quality will be the first thing to go after they fire any remaining, expendable human workers.
Not the only game in town (Score:3)
Yeh, this is really sad - WholeFoods for all that it is pricy as hell also sells a bunch of really good quality things that you can't easily get elsewhere.
That's just not true anymore. I have a half dozen grocery stores within 30 miles of my house that are every bit as good (sometimes better) than Whole Foods and serve price points similar to Whole Foods. And frankly there is rarely anything I would ever buy that I can only get at Whole Foods. Decent quality organic produce and meats? Available at several premium grocery stores near me and sometimes even at my local Kroger. Sustainable fish? I've got a fish monger [monahansseafood.com] that is WAY better than Whole Foods plu
Re: (Score:2)
Where Whole Foods is useful to me is as a purveyor of international foods not found at local stores. But the assortment has already shrunk, and with this, it's bound to shrink even further.
WF no longer carries products like coldwater shrimp, stockfish, European HP sauce (without the corn syrup that's in the US made version with the same name), chantarelles, salty licorice, single-sourced named coffee, non-seedless citrus fruits, and much else that was the reason for going there. Now they'll just be anothe
Re: (Score:3)
They have dry-aged steaks (the real deal). And I really like their Kenyan coffee. Their produce and cheese department is above-average. But other than that, I hardly ever go in - the main problem is that it's not a one-stop shop... you still need to visit another grocery store. It's the same problem that I have with Trader Joe's.
Comment removed (Score:4, Insightful)
Re: (Score:2)
I also question the usefulness of a store that doesn't sell essentials like asprin.
The Whole Foods in my neighborhood shares a strip mall with a drugstore. You're more likely to find aspirin at a drugstore than Whole Foods.
Re: (Score:2)
Re: (Score:2)
No other supermarket on the planet refuses to sell basics like that.
If a supermarket shares a strip mall with a drugstore, they're more likely to have reduced selection of the basics and use the available shelf space to sell other stuff to make up the difference in profit margins. Or a drug store may not carry pet food if located next door to a pet store. I've seen countless variations of merchandising like this.
Re: (Score:3)
Re: (Score:2)
Making it cheaper doesn't necessarily have to decrease quality. Whole Foods is heavily invested in the organic, non-GMO nonsense, which raises costs at negligible benefit. I'd love to see them switch their focus to quality exclusively, and and drop the catering to scientific illiteracy. Might be able to lower costs and increase quality that way if they act more like Wegmans.
Re: (Score:2)
Re: (Score:3)
It does seem a bit odd.
You buy a store with a strong established brand image as a premium store and plan to totally reinvent the brand as a bargain low cost store.
They're losing a large chunk of the value of their acquisition. If they want a low-cost brand they might have been better served purchasing a low-cost chain that already had that brand established.
They're going to piss off their existing clientele and probably be shunned by their intended market because they have the exact opposite brand image cu
Re: (Score:2)
Just uninformed musing here.
Re: (Score:2)
The usual plan is to buy a brand with a good reputation, and start selling cheap-as-possible crap instead of what the brand used to sell, milking the reputation and customer inertia for years. Good money to be made, for those with no soul. But you don't announce you're doing that! So I can't even guess what Amazon is thinking here.
Re: (Score:2)
The funny thing is that when I go to Whole Foods, it's because I'm looking for foodstuffs that are exotic and generally unavailable anywhere else. I don't go to them for mainstream food, that's what the local Kroger-owned grocery is for, or on rare occasions Safeway/Albertsons or even the locally-owned grocery chain.
I treat Whole Foods much the same way that I treat Trader Joes, which is for exotic stuff to supplement my main groceries. I have no need for another mainstream grocery store, I already have a
Re: (Score:2)
Whole Foods was known for three things:
1) You get the same brands as you do at other stores, but you pay a lot more for them.
2) An ok but not great selection of produce.
3) There's a lot of woo here, like organic free-range flaxseed oil and "all-natural" dietary supplements of dubious quality that sound like snake oil for the gullible.
I always assumed the high prices were to support #3 (other stores can even do "organic" at a much lower price) but maybe Amazon can find real spots in the company where ineffic
Re: (Score:2)
You know that Whole Foods (and the world at large) exists outside Silicon Valley, right?
I didn't think that the Matrix was that large.
Re: (Score:2)
Who do you think is gonna win that fight?
Bezos is destroying the thing he just paid billions for. Does 'Whole Foods' own any real estate?
Re: (Score:3)
People who shop at Whole Foods do not want to rub shopping carts with the dirty people from Walmart.
I saw the strangest thing in Walmart about a week ago. I walked in and saw an attractive woman.
Austin Texas is different from Texas (Score:5, Informative)
You do realize Whole Foods started in Texas
Austin Texas. A small bubble of something close to sanity surrounded by the rest of the lunacy that is Texas. Austin isn't much like the rest of the state. They call it weird but it's only really weird if you compare it to the rest of Texas. For people like me who visit Austin regularly but don't live in Texas, it isn't weird at all.
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Whole Foods is still way cheaper than buying groceries in Canada, and you guys are complaining about the price?
That's why I don't fly up to Canada to buy my groceries.