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Businesses The Almighty Buck

Amazon To Complete $13.7B Whole Foods Deal Monday, Promises Lower Prices and Prime Integration (geekwire.com) 97

Posted by msmash from the amazonization dept.
Amazon announced today that its $13.7 billion acquisition of Whole Foods will close this Monday, Aug. 28, and revealed how it plans to lower prices and integrate its Prime membership program into the Whole Foods checkout process. From a report: Amazon said that starting Monday, it will lower prices of items at Whole Foods like organic bananas, brown eggs, salmon, ground beef, and more. It also plans to "make Amazon Prime the customer rewards program at Whole Foods Market and continuously lower prices as we invent together," as Jeff Wilke, CEO of Amazon's consumer business, said in a press release. Amazon will place its Amazon Lockers package pickup machines in some Whole Foods stores. It will also make Whole Foods' private label products available on its website, on AmazonFresh, on Prime Pantry, and Prime Now. Whole Foods CEO John Mackey will stay in his current role, and Whole Foods' HQ will remain in Austin. The grocer will maintain operations under its current brand.
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Amazon To Complete $13.7B Whole Foods Deal Monday, Promises Lower Prices and Prime Integration More

Amazon To Complete $13.7B Whole Foods Deal Monday, Promises Lower Prices and Prime Integration

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  • Amazon has blown this acquisition. 'Whole Paycheck' was for those people who like to impress each other with how much the overpay (for the same stuff).

    Cutting the price of 'pre distressed blue jeans' lowers sales, duh.

    • Okay, it's been years since I was last in a Whole Foods, but did they actually sell blue jeans?

    • Amazon has blown this acquisition. 'Whole Paycheck' was for those people who like to impress each other with how much the overpay (for the same stuff).

      Not always the same stuff. I don't know where else you could pay top dollar for a jar of water with a couple of asparagus spears in it.

    • Re:Open a new overpriced grocery chain! (Score:5, Interesting)

      by Strider- ( 39683 ) on Thursday August 24, 2017 @03:27PM (#55077903)

      'Whole Paycheck' was for those people who like to impress each other with how much the overpay (for the same stuff).

      Yes and no. While I don't shop at Whole Paycheque on a regular basis, their pricing for staples wasn't that far out of line from the other grocery stores in my area. The big thing for me is that they are a reliable source for less common, high quality ingredients. My most common purchase there is organic whipping cream from one of our local dairies. Their cows are grass fed, and the cream itself is just straight heavy cream, rather than containing the usual stabilizers (Guar gum, carrageenan, locust bean gum) in your typical whipped cream. I'm not chemophobic or any of that crap, it's that it just whips up differently, and in my opinion, better than the commercial stuff. it just takes more skill to get there, and if you fuck up you wind up with butter.

      • Re: (Score:1)

        by mingot ( 665080 )

        So you honestly think that if I made you two bowls of whipped cream, one with your buzzword compliant HWC and the other with whatever crap I could get down at the poor people grocery store that you could actually tell the difference?

        • I make whipped cream desserts, and like the local stuff more. Better flavor.
          I vote with my wallet and would rather give my dollars to a local business anyway, not Unilever or Halliburton or Kraft, etc.

        • Re: (Score:3)

          by Strider- ( 39683 )

          Depending on what you did with it, yes, especially if doing an A:B comparision. yeah, if you loaded it up with sugar and vanilla, it would be harder to tell, but if you're running it minimalist, it's pretty easy.

          Due to the diet, the grass fed whipping cream will be more cream coloured rather than white. It also has a more pronounced flavour. This latter bit is obviously going to be masked if you add a bunch of Vanilla or other flavourings, but is detectable otherwise. When doing something simple like strawb

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      Wholefoods was struggling due to competition from lower-priced rivals selling upscale food. That's the only reason they sold out to amazon in the first place. It would be stupid for Amazon to continue repeating the same mistakes of the previous owners. There just aren't enough people interested in wealth-signaling to sustain a large-scale over-priced grocery business.

      • Exactly. Amazon has bought a brand name as much as anything else, and I'm sure the marketing will be along the lines of "and now you can shop just your like pretentious Yuppie neighbors!" If there's one universal truth, it's that those lower on the economic ladder may bitch about their betters, but if the opportunity comes to buy the same goods and services, they'll ignore the irony and hypocrisy, and jump at the opportunity.

        • If there's one universal truth, it's that those lower on the economic ladder may bitch about their betters, but if the opportunity comes to buy the same goods and services, they'll ignore the irony and hypocrisy, and jump at the opportunity.

          Well, it's more like a "strong tendency" than "universal truth", but your point is well taken.

          • Devil is in the details. Dumb 'new money' is sure to spend like a drunken sailor, hence it lasts about a second. Dumb 'new credit' is even worse.

            It takes generations to build the disconnect between value and cost to the point where a $300 pair of pre distressed blue jeans 'makes sense'.

            Also 'betters'? I bet the GP has never known any richers. _Nothing_ rots a brain like inherited wealth.

      • Re: (Score:2)

        by rtb61 ( 674572 )

        More simply put. Drop prices with a cash hoard to support it for as long as necessary to put your competitors out of business and then raise prices to way above what they originally were and profit.

    • ..no, I wouldn't say that's true at all. I don't buy much at Whole Foods, but what I do buy, I buy there because they're things I can't find anywhere else, and that I can't substitute something else for. Also, if I want to try a really interesting bottle of beer, that's the best place to go. 95% of my other shopping is places like Winco (which is the best place to get generic things). If Amazon turns Whole Foods into just another generic Safeway-like grocery store, then that's how they'll be screwing up.

      • if I want to try a really interesting bottle of beer, that's the best place to go.

        Sounds like you need some good beer stores! In my area, Whole Foods has a decent, but far from exceptional, selection compared to many places within walking distance of them.

        But the places that have the best selection also tend to look like run-down 7/11 wannabes, so there's no social cache to shopping there.

        • The few really good dedicated liquor stores disappeared, likely due to the recession. Whole Foods has about the most extensive selection -- including more selections of alcohol-free beer than anywhere else, which includes the offering from Guiness (which is pretty good). Being an athlete as well as a techie, there are times I'd like a beer or two but shouldn't have one because of the alcohol.

        • Just because everyone mispronounces the word cache does not mean that the word you're looking for isn't cachet

          • Just because I accidentally dropped a 't' doesn't mean that I wasn't intending "cachet". That's some prime pedantry, right there. As a fellow pedant, I salut you!

            • That's some prime pedantry, right there.

              I want to make a Prime Pantry joke, but it's not coming to me.

              And I won't say anything about salut - I'll just assume you were switching to French.

      • If Amazon turns Whole Foods into just another generic Safeway-like grocery store, then that's how they'll be screwing up.

        I could see that being true for existing Whole Foods shoppers, but since I don't buy their foofy stuff, I DO go got places like Safeway. If Amazon can get grocery prices even lower (for the same or equivalent products), great.

    • Amazon has blown this acquisition. 'Whole Paycheck' was for those people who like to impress each other with how much the overpay (for the same stuff).

      It's pricey, but for a while Whole Foods was the only grocery store chain that didn't suck. Before WF, your A&P, Safeway, Krogers, Food Lion, were all in a race to the bottom, closing in-store bakeries and butchers, closing check-out lanes, sad wilting produce, E. coli meat, and zombie employees shambling over to clean up that mess in aisle number 3.

      Profit margins at grocery chains were already razor thin when Wal-Mart announced they'd hop into the business and drive them all down the tube. Whole Foods

      • Deliver to your home with a drone would be even better. The closest "grocery" store is WalMart. I have only been inside once after a snowstorm. Otherwise we go elsewhere. But if you want low-quality produce and frozen convenience foods, then WalMart is the place to go.

      • Re: (Score:2)

        by spun ( 1352 )

        Maybe I'm just lucky but I live a block from a really nice Smith's, it's always clean and well stocked and they pride themselves on never having lines at the checkout. Like, if there's more than three people in any line they will open another register. I asked and they are a union store that pays pretty well, so I don't quite know how they manage, but it's always super busy.

  • It'll be interesting to see how this plays out (Score:2, Insightful)

    by Anonymous Coward

    Supermarkets already track everything you buy and correlate these purchases with a whole host of other data to cater their inventories to the communities they serve -- but Whole Foods will have an advantage they don't: cross-references to your entire purchase history of sundries online. They can aggressively market to customers they already know they have (your billing and delivery addresses plus Prime membership, 'natch). Home delivery? You bet. Drone delivery? Maybe! Entire aisles of not-food products you

  • I can see it now (Score:4, Funny)

    by 93 Escort Wagon ( 326346 ) on Thursday August 24, 2017 @03:16PM (#55077811)

    ... continuously lower prices as we invent together"

    Soon we're going to start seeing Whole Foods commercials on TV. They will feature smiling Whole Foods employees, standing next to their products under a large sign with the price. Then the smiling head of Jeff Bezos will bounce into the frame, hit the price and cause it to go down.

    Then the motto will appear at the end of the spot - "Whole Foods. Continuously lower prices, always."

  • Did they not do any research on who actually shops at Whole Foods? People who are paying $10 for a jar of asparagus water or $8 for a bag of organic gluten/grain/fat/salt/flavor free chips generally aren't the penny pinching type. People go to Whole Foods because they want specialty stuff that regular chains don't carry not for low prices. The Prime integration piece might fit in well though.

    Personally I don't see these two companies as being a good fit, but Amazon has the money to keep it going even i

    • People go to Whole Foods because they want specialty stuff that regular chains don't carry not for low prices.

      I think that a very large percentage of Whole Foods customers shop there because it indicates status, too. Also not value shoppers.

      • High quality produce is something else you can get there that you can't get at some of the lower priced competition.

  • Costco seems to offer the ability to cover those needs far more economically than Whole Paycheck. The fact they don't even have Whole Paychecks in this city other than in the gay district and a couple of yuppy colonies keeps the temptation to waste my paycheck on items that are rapidly becoming available at the "normal" grocery stores, and not just in the ever expanding hippie isles makes me wonder if it's worth looking at. Even Wal-Mart has organic stuff under their own Great Value label these days.

    Too l

  • Great (Score:5, Interesting)

    by DontBeAMoran ( 4843879 ) on Thursday August 24, 2017 @03:24PM (#55077883)

    Great. Amazon.com now sells grocery items.

    Meanwhile, in Canada, Amazon.ca doesn't even sell their own Amazon Fire tablets.

    • Uh, they've sold grocery items for a while now.

    • Re: (Score:2)

      by tlhIngan ( 30335 )

      Meanwhile, in Canada, Amazon.ca doesn't even sell their own Amazon Fire tablets.

      That's because it would be useless.

      The Fire tablets are basically to sell content from Amazon - movies, TV shows, books, music, etc. Of those, the only things available in Canada are books, some TV shows (prime video exclusives) and apps. There's no enough there to sustain Amazon or justify the extra costs.

      If you wanted it because you would root it to install Google Play and have a cheap tablet, well, Amazon's not exactly wantin

      • If you wanted it because you would root it to install Google Play and have a cheap tablet, well, Amazon's not exactly wanting that use case.

        I wanted one because all I want is a video playback device. So yeah, I'm not exactly the ideal customer for their use case.

  • Bring back Milk Crates. (Score:5, Informative)

    by 0100010001010011 ( 652467 ) on Thursday August 24, 2017 @03:27PM (#55077907)

    Dear Amazon WFoods, Walmart, Meijer, Kroger, et al.

    If you want my money, bring back Milk Crates. All of the 'get groceries delivered' services I've seen use most inefficient process possible. The store pays people minimum wage on the night shift to unpack boxes and palates of food items, arrange them on a shelf so that I can pay someone else to take it off the shelf and deliver it to me.

    Cut out the middle man. Pack a milk crate full of what I want in a central warehouse. Pay drives to drop them on my front door. Cut out the electricity, real estate and overhead of running a store. When my next shipment comes pick up my empty milk crates. That way I don't have to breakdown a dozen boxes a week for recycling.

    Milk crates are the ultimate utility cargo container. You can fit a single one on the back of a bike. They stack well, you can strap a large number down to a trailer. The large transit vans will easily fit a neighborhood's worth of them. They're strong, light weight and in a pinch can be used to build a college dorm room.

    Stores need to be a fraction of the size they are now. I went wandering to see what my local big box store had. DVDs and CDs had almost as much foot print as produce. I can't think of the last time anyone I knew *had* to go get Grownups 2 at 2 in the morning.

    • Milk crates are the ultimate utility cargo container.

      You just listed a whole slew of reasons why stores don't use milk crates for customer delivery.

      Stores need to be a fraction of the size they are now. I went wandering to see what my local big box store had. DVDs and CDs had almost as much foot print as produce.

      I.e., "stores are selling things I don't want. They should stop." How about you go to stores that sell what you want, instead?

      I can't think of the last time anyone I knew *had* to go get Grownups 2 at 2 in the morning.

      I can't think of the last anyone I knew (or even didn't know) *had* to get a bag of carrots at 2 in the morning.

      Here's the clue: stores sell things to a lot of different people, so they stock a lot of different things. Either learn to live with it, or go to stores that sell what you want a

      • I.e., "stores are selling things I don't want. They should stop." How about you go to stores that sell what you want, instead?

        Go sit in the CD & DVD section and see how many people walk through there. It's a ghost town.

        • I've been to the local big box store a lot of times, and the CD/DVD section always has people there. I'm one of them. I don't know why you have such a problem with a store selling things you don't want, but you might want to get over it.

          • I've been to the local big box store a lot of times, and the CD/DVD section always has people there.

            I've never seen one as busy as a well-situated record store of the same size. I, for one, don't shop in big box store music sections not because I give a shit about preserving record stores — they'll either survive or not on their own merits — but because of the risk of getting an edited version of a CD when I want the real thing.

            • I've never seen one as busy as a well-situated record store of the same size.

              This proves exactly what? That you need to figure out how to shop at stores that sell what you want to buy and not to shop at stores that sell things you don't?

              It certainly doesn't prove that a big-box store should stop selling DVDs and CDs.

              but because of the risk of getting an edited version of a CD when I want the real thing.

              What absolute nonsense. You think big-box stores have nothing better to do than tell record manufacturers what they need to edit out of a CD? And that the CD you buy in a big box store is somehow different than the same thing you buy for more at a specialty store?

              • What absolute nonsense. You think big-box stores have nothing better to do than tell record manufacturers what they need to edit out of a CD?

                Are you really this stupid? They pay someone specifically to do things like that. Wal-Mart in particular makes all kinds of demands of all of its suppliers. But even better proof that you're just spewing unformed thoughts out of the wrong hole is that many albums already come in multiple flavors; a censored one for christian-friendly communities, and an uncensored one for everyone else. Wal-Mart just carries the insipid versions, because nobody ever stopped going to Wal-Mart for diapers and doritos because

    • Re: (Score:2)

      by DogDude ( 805747 )
      Your idea that everybody wants to pay to have their groceries delivered (by "Milk Crates", no less) is nutty. Get a grip, dude.

      • Your food will cost less. You're paying for Walmart to keep the lights on, clear the parking lot of snow, etc.

        • Re: (Score:2)

          by DogDude ( 805747 )
          Your food will cost less

          My food barely costs anything now. Why would I care?

          You're paying for Walmart to keep the lights on, clear the parking lot of snow, etc.

          I don't pay for Wal-MArt for anything, thanks.

          But you're saying that you can't afford to buy food at Wal-Mart? Have you considered maybe getting a job?

  • make Amazon Prime the customer rewards program at Whole Foods

    Every other grocer offers their rewards program for free. Whole Paycheck? $99.

  • The beginning of the end... (Score:5, Interesting)

    by erp_consultant ( 2614861 ) on Thursday August 24, 2017 @04:40PM (#55078451)

    You had better believe that Kroger and the other supermarket chains are quaking in their collective boots over this. Amazon does this all the time. They find business segments that are poorly run - book publishing, TV/Movie/Music, etc. - with poor customer service and they swoop in and take over it.

    Supermarkets are burdened with having to deal with literally hundreds of union locals. They have been slow to embrace technology. Supermarkets operate on extraordinarily thin margins. They were slow to catch on to the organic food trend, thus allowing the growth of Whole Foods and others in the first place.

    Next time you're in a grocery store take notice of how it is laid out. Lots of vertical aisles. Impulse items at the cash registers. Necessities (eggs, milk, bread, etc.) at the very back of the store. Junk food is always between the front of the store and the necessities. Promoted products are at eye level on the shelves, other products at the bottom where you might not see them.

    Every Kroger or Safeway store looks exactly like this. And it has for the past 50 years. This is not exactly an industry of innovation. Amazon, pardon the pun, is going to eat their lunch.

    • Re: (Score:2)

      by DogDude ( 805747 )
      Amazon has figured out how to sell dollar bills for $0.90. They're not doing anything extraordinary. They're just preying on the greed of their customers and their investors.

    • Every Kroger or Safeway store looks exactly like this. And it has for the past 50 years.

      And the local Whole Foods has copied exactly that same pattern. Only the impulse items cost a lot more. You think Amazon is going to change it? Grocery stores have had generations of experience on product placement that Amazon is late to the party at doing.

      • Where I live there is a store called Sprouts. A lot like Whole Foods, just a lot less pretentious. They have the best produce bar none. When I walk in the store I don't see aisle after aisle. The store is open, well lit. I can see every item at a glance. A lot of the time their prices are as good or better than Safeway or Kroger. Their staff is knowledgable and friendly and seem to enjoy their jobs.

        They don't sell much junk food and that suits me fine. I don't buy much of that stuff anyway. The store is sma

    • Re: (Score:2)

      by jIyajbe ( 662197 )

      The *last* thing WF has is poor customer service. My very first time there--I had never heard of it before, decided to try it--I had an item that wouldn't scan. Every other market chain would have called for a price check that would have meant a 3-5 minute delay for not only me, but the four people in line behind me. At WF, the clerk looked the item over, said "that looks like about $4.99", rang that up, and we continued on. I have also (since then) had multiple instances of some item not scanning, and they

    • Necessities (eggs, milk, bread, etc.) at the very back of the store.

      That's because these things spoil and need to by cycled more frequently by the people working in the back of the store. They're put on the back and edges of the store to minimize wasted time and blocked aisles, as well as to allow for work space, counters, and POS terminals for the bakery, the deli, the butcher, etc. It's a functional design. Legend has it you can look past the milk and see an employee stocking more!

    • If "innovation" means ignoring the well-established most profitable store layout in favor of something creatively weird, then Amazon is doomed.

    • Next time you're in a grocery store take notice of how it is laid out. Lots of vertical aisles. [...] Every Kroger or Safeway store looks exactly like this. And it has for the past 50 years. This is not exactly an industry of innovation.

      Well, you're right and you're wrong. You're right to say that the supermarket is not where the bulk of innovation in food is occurring. But you're wrong to say that every grocery store is laid out in the same way. There are actually about three or four typical layouts for supermarkets, which are variously used depending on intent. For example, some supermarkets are using diagonal layouts now, which makes the store more confusing so you spend more time there, and walk past more end caps. And there's numerous

      • Interesting. Not having been in ALL grocery stores I probably should have stated that the layout is the same in every grocery store that I have been in. Honestly I've never seen a store with a diagonal layout.

  • They're not buying Whole Foods. They're buying whole foods' distribution network of refrigerated storage and freezers, so they can distribute "whole foods TM" brand amazon crap.

  • If I bought whole foods I'd load their customer database into Amazon, ban everyone on it, and then liquidate the company. Just on principal I wouldn't want clueless paranoid new-age idiots who think gluten and GMOs are going to kill them to be my customers no matter how much money they give me.

    • Just on principal I wouldn't want clueless paranoid new-age idiots who think gluten and GMOs are going to kill them to be my customers no matter how much money they give me.

      It's easy to see why you're not running a large business. They never go out of business by depending upon a supply of clueless idiots.

  • It'll be interesting to see how Amazon implements selling to different customers at different prices, considering that prime membership costs $100 more than a typical grocery store loyalty card. Costco and Sam's Club have paid memberships, but they don't mix selling to members and non-members for different prices. However strictly Amazon enforces the membership requirement for discount, some people who paid the $100 will be making cheating accusations, and others will be wanting to use their membership to h

  • Suppliers (Score:4, Interesting)

    by manu0601 ( 2221348 ) on Thursday August 24, 2017 @06:52PM (#55079433)

    make Amazon Prime the customer rewards program at Whole Foods Market and continuously lower prices as we invent together

    In other words, if you are a Whole Foods market supplier, you would better purchase a rope to hang yourself right now, because you may not be able to afford that in a few months.

  • Get ready to drive a LONG distance to find a grocery store. There are so few towns that have grocery stores "near" me, it's pathetic already.

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