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Amazon's Grocery Push Keeps Stumbling After Whole Foods Purchase (bloomberg.com) 132

Posted by BeauHD from the grocery-shopping-activity dept.
Bloomberg reports that Amazon is struggling in the $840 billion grocery market, more than a year after it spoked the industry with the $13.7 billion acquisition of Whole Foods last year. "The number of Amazon Prime members who shop for groceries at least once a month declined in 2018 compared with 2017, according to the results of an annual consumer survey released Wednesday by UBS analysts," the report says. "The drop was surprising given the company's Whole Foods investment and expansion of two hour delivery service Prime Now, the analysts wrote in a note to investors." From the report: A separate study by research firm Brick Meets Click found that households using grocery delivery and pickup services from physical retailers spend about $200 per month and place orders more frequently than Amazon grocery shoppers, who spend $74 a month. The number of households with access to online grocery delivery and pickup options will reach 90 percent next year, up from 69 percent in 2017, thanks to big investments by food retailers of all sizes, the report states.
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Amazon's Grocery Push Keeps Stumbling After Whole Foods Purchase More

Amazon's Grocery Push Keeps Stumbling After Whole Foods Purchase

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  • I need to feel those melons (Score:5, Interesting)

    by fluffernutter ( 1411889 ) on Thursday December 20, 2018 @10:14PM (#57839834)
    I just need to pick out my own groceries. Furthermore, grocery shopping is not at all unpleasant, and smart stores have interesting samples etc. Furthermore, the best stuff comes from the farmer's market.

    • Re: (Score:3)

      by hawguy ( 1600213 )

      I just need to pick out my own groceries. Furthermore, grocery shopping is not at all unpleasant, and smart stores have interesting samples etc.

      That depends on personal preference, I don't like to go to the grocery store at all, I'm happy to let someone else pick out my produce if it means that I don't need to set foot in the store.

      I don't use Amazon for shopping though, I use my local supermarket's pickup service, I place my order online, then stop on my way home from work and they bring it out to the car for me.

      • I guess that's fine, since you can trust your supermarket not to give you the worst of everything. Where I live, people have been trying those kinds of online services for 20 years and they never have any success. One time I came at the agreed on pickup time and had to wait 1 hour for my gorceries. Amazon, not sure if I would trust them either.

        • Re:I need to feel those melons (Score:5, Insightful)

          by rtb61 ( 674572 ) on Thursday December 20, 2018 @11:22PM (#57840018) Homepage

          Which is why Amazon is struggling, there is a lot of competition in that market and once you are happy with your store, you tend to stick with it until they do something wrong. For me to change from Coles, it took those idiots, purposefully running down the number of check out chicks, so that you had to waitt 10 to 15 minutes to get served even in the middle of the day or use the self service check out. Well, the other alternative was to go to the competitors, seriously you want to give me shite service on purpose to force me to do what you want me to do, well, dropped going to their stores and ordered deliveries from somewhere else, that 20 odd minutes of forced waiting will cost 2 years of custom, minimum, already at the six month mark.

          Look Amazon has a pretty shitty rep, abuse staff and staff are customers as are the people who know that staff and well, supermarkets of all sorts of brands are everywhere. So a reasonable, reliable job and you keep custom, fail and you lose them until their next supplier fails. Would I order groceries from Amazon, no until my current supplier screws up, why bother, the prices will be much of a muchness and it will be down to service and reliability. Amazon is about cheap and nothing else, they have nothing to sell in the grocery market, buy cheap, sell cheap is who they are and probably quality has taken a nose dive at whole foods in pursuit of cheap.

          Keep in mind, people often chat with staff at grocery stores, it's a more personal shopping space, driving them to focus on store stuff and ignore customers, is guaranteed to lose you customers in that working space. Can Amazon with it's corporate nature ever do groceries effectively, probably not, it has no idea about person to person customer service.

          • Re: (Score:1)

            by Anonymous Coward

            purposefully running down the number of check out chicks,

            I think we all understand the real reason this upset you

          • Can Amazon with it's corporate nature ever do groceries effectively, probably not, it has no idea about person to person customer service.

            Wow, really?

            To the point that I'm willing to take more chances with them than others, since I know they'll make it right if something goes wrong.

            • Re:I need to feel those melons (Score:5, Interesting)

              by cascadingstylesheet ( 140919 ) on Friday December 21, 2018 @10:02AM (#57841352) Journal

              Hmm, a paragraph disappeared there. Restored below ...

              Wow, really?

              I've used Amazon for ages (since they were just books, lol), and while I've rarely needed service, when I have, they've always impressed me as being super helpful and willing to just refund or replace things quickly.

              To the point that I'm willing to take more chances with them than others, since I know they'll make it right if something goes wrong.

          • I don't know. There are often times I wonder if I just grew up with a certain mindset and now I'm stuck with that for life.

            There are some things, I just don't buy online. Clothes, food, any large purchase. I also don't think I'll ever be comfortable with push button start cars, any kind of Alexa/Google home...

            I go on an old man rant here, but I'm not even that old. I just don't see any benefit to this stuff. But at work, I talk to guys just 10 years younger and they're good with it all.

            Really I have no reas

      • I don't like to go into the grocery store either. But there are so many things where I've never had a good experience letting any delivery service pick items for me, it almost assures the crappiest produce it would seem, or even things like the oldest possible loaf of bread... even when you are using the in-store shopping service where you'd think they would want you to use the service again.

        I'm come to think that there just are not that many people working at grocery stores who know what good produce even

        • Corporate policy is probably to push items that are about to expire first. They would directly lose money on expired items otherwise. It also tells me that they overstock too many items if the expiration date is too short, that whole logistics thing. Workers are just doing what they are being told to do, I would be surprised if they are that malicious or incompetent.

          You are right though, who is going to want to buy week old bread online?

          • Re: (Score:2)

            by hawguy ( 1600213 )

            Corporate policy is probably to push items that are about to expire first. They would directly lose money on expired items otherwise. It also tells me that they overstock too many items if the expiration date is too short, that whole logistics thing. Workers are just doing what they are being told to do, I would be surprised if they are that malicious or incompetent.

            You are right though, who is going to want to buy week old bread online?

            Unlikely -- stores accept a certain amount of spoilage, and adjust ordering to keep it in that level -- but what they won't tolerate is customer loss - customer acquisition cost is high enough that they'll gladly throw away some produce if it means they'll keep a repeat customer happy.

      • Re: (Score:2)

        by havana9 ( 101033 )

        That depends on personal preference, I don't like to go to the grocery store at all, I'm happy to let someone else pick out my produce if it means that I don't need to set foot in the store.

        I don't use Amazon for shopping though, I use my local supermarket's pickup service, I place my order online, then stop on my way home from work and they bring it out to the car for me.

        I like to go to the grocery store. I have a small supermarket across the street, and If i like home delivery I could go 0.1 and phone them and get food delivered at home for a small fee. There's also a bigger supermaket chain that has a site for delivery the groceries at home or to prepare a box to get at the shop at walking distance.
        The fact is CD and books are quite different from ham and oranges, for groceries there isn't a tail effect: even with specialities, like Parmigiano Reggiano or Castelmagno ch

    • I need to feel those melons

      Then have I got a Debian package for you [slashdot.org]!

  • Interesting (Score:1)

    by Anonymous Coward

    How Whole Foods is very non-tech and amazon high tech. I spend about what they say and I am an amazon prime member and the only I do not like is that Whole Foods never answers the phone anymore. I hope they fix that very soon. I always go to the store myself even though there are delivery services. Most recently I tried to call to see if they had any gardening tools. It turned out they did but since they didnâ(TM)t answer the phone I had to wait a ridiculously long time to find out

  • The local Fred Meyer looks almost like Whole Paycheck after the recent changeover. The prices are still Fred Meyer prices, however, at least for now.

    • Our local Fred Meyer got the makeover treatment about 18 months ago. I like that they’ve expanded their organic and natural foods section... that’s the only reason I ever go there anymore. For everything else, I shop at Winco - it’s closer, and their overall prices for the exact same stuff is usually 15-30 percent lower (guesstimating based on how much our grocery bills have gone down).

      I took over the grocery shopping after my wife started having some health issues - and I’ve found I

      • Winco is great. They opened one near me about 2 years ago. Think of it like a Costco or Sam's Club without the membership fee. Awesome prices on items such as:

        Bread - $1.67 for a fresh baked in the store loaf of whole wheat bread. Regular grocery stores charge about $3-4.
        Bagels - $1.76 for a package of 6. Other store charge at least $2.99.
        Orange Juice - $1.99, half the price of the other stores

        The thing I like best is that they don't have these weekly sales gimmicks. The prices are the same week after week.

  • how (Score:5, Interesting)

    by phantomfive ( 622387 ) on Thursday December 20, 2018 @10:24PM (#57839868) Journal
    How is this profitable? Are the major grocery stores doing this at a huge loss? It seems like delivery should add a hefty fee on top of the grocery bill.

    • Re:how (Score:4, Informative)

      by belg4mit ( 152620 ) on Thursday December 20, 2018 @10:39PM (#57839916) Homepage

      There are fees. Part of the problem Amazon has is that there are two separate systems, one Amazon-sourced and one Whole Foods-sourced. Foods show up from both when you're searching, and there's a minimum order for each as well, meaning that unless you're very careful or only want a very narrow set of things, you may end up having to spend $40 or more for each to complete your order, and then pay a tip to a separate drivers for the separate orders as well.

      (Speaking from experience as I decided to try this system a few weeks ago when I was stuck in bed with a nasty flu for several days)

    • Re:how (Score:4, Insightful)

      by Actually, I do RTFA ( 1058596 ) on Thursday December 20, 2018 @10:56PM (#57839956)

      Most major grocery stores have a very thin margin, 2-3%. Whole Foods probably has a better margin. But they have a hefty delivery fee if you order under $35. So, that's probably just over a dollar. If they plan the delivery path well, that's probably right around the cost to deliver (esp. since they include a tip by default and the drivers are independent contractors).

      • Whole Foods probably has a better margin. But they have a hefty delivery fee if you order under $35.

        So buy two apples.

    • I have a couple local chains that do both curbside pickup and delivery. The former has dedicated parking spots, you text a number, and they come out with your order. The latter they pull up and drop off your stuff. In either case you sign up for a particular timeslot (e.g. 5:30 ) and they'll have your stuff ready, in-fridge or dropped off shortly after that time. At least in my case, both charge 3% per item for the "shopping" done by an employee at the store, then curbside is a $6 fee, delivery is $15. Not

    • you pass the full pop for everything, it usually adds about 20% to your bill. My bro hates shopping so he looked into it and that's why he still shops. It woulda been around $150/mo to get his groceries delivered.

    • Delivery isn't as expensive as you seem to think. Pizza delivery happens everywhere, for not that much money.

      If a driver makes $10 an hour, and delivers two orders an hour, the fee would be about $5.

  • Whole food caters to a certain demographic; There issues with Whole foods were not the products it sells, or the price, but that it got too big and no longer had quality control.

    A secondary problem is that it no longer was the exclusive retailer of whole foods, but now has competition. You can buy real foods at all outlets, even Walmart, even your locally owned grocery store. I don't because for a lot of the items it actually costs less at Whole Foods.

    But ever since Amazon has bought the stores it ha

    • Re: (Score:1)

      by Anonymous Coward

      " so it may be that the retail spae iteself it secondary" No, it's designed to replace / undercut / destroy the existing retail competition. Then Amazon does whatever Amazon wants, all of the time, and people have no choice left.

      That's why Amazon is into retail. Because retail is not Amazon, and it must become Amazon or be destroyed.

  • Whole Paycheck (Score:5, Insightful)

    by ugen ( 93902 ) on Thursday December 20, 2018 @11:20PM (#57840014)

    Whole Paycheck, as we know it, is still as overpriced as ever. While they do have some products not available elsewhere, where they have exactly the same products to compare, their prices are routinely 30% above other stores.

    Even a reasonably paid professional will find it hard to justify WF price premium (particularly when excellent groceries are available at several competing chains, esp. in our area thanks to "ethnic" chains moving in). As long as WF will remain priced as it is, I don't see it making any gains.

    Anecdotally, I moved from buying 50% of my groceries at WF 10 years ago to virtually nothing (the only thing I buy there nowadays is bread)

    • Re: (Score:2)

      by pz ( 113803 )

      Agreed. Comparing WF before and after Amazon, the prices are the same on the special items ONLY if you include the 10% additional discount given to Prime members. We had all hoped that Amazon would bring some of its immense efficiencies to WF and lower prices, but the opposite seems to have happened.

      And, anecdotally, despite buying fish at WF for probably two decades now, last weekend was the first time I found a parasite.

    • " As long as WF will remain priced as it is, I don't see it making any gains."

      Except Whole Foods *is* making gains. What is not making gains is Amazon's non-Whole Foods grocery business. The theory was that buying an established grocer would help Amazon with its grocery delivery business but it hasn't.

    • Whole Paycheck, as we know it, is still as overpriced as ever. While they do have some products not available elsewhere, where they have exactly the same products to compare, their prices are routinely 30% above other stores.

      Even a reasonably paid professional will find it hard to justify WF price premium (particularly when excellent groceries are available at several competing chains, esp. in our area thanks to "ethnic" chains moving in).

      About the only reason for a person to pay that price premium at a store is to "improve" their shopping experience by the store deliberately limiting who can shop there with their prices. (Keeping the riff raff out, in other words.)

      I would make some sort of extended comment about what that says about the typical Whole Foods shopper, but I'll refrain ...

  • Here's a way in (Score:5, Interesting)

    by John.Banister ( 1291556 ) * on Thursday December 20, 2018 @11:34PM (#57840048) Homepage
    Delivery for high quality perishable products is hard. It shouldn't be the initial focus. One thing Amazon has is the customer reviews. I just searched for customer reviews of local produce and farmer's markets, and most of the front page links were to TripAdvisor with a few also to Yelp. So, here's what Amazon could do...

    Free listings for non-taxable food where the delivery method is customer pick-up in a store smaller than 5000 sq ft, provided that the vendor sells at the advertised price, giving customers who bring an "I saw it on Amazon" QR code generated by the product page a 5% discount, and the code verification gives Amazon a report of those sales (which can allow the customer a "verified purchase" notation if they review the product). Vendors who rack up lots of sales with positive reviews are targets for deals that make their product carried by the nearest Whole Foods.

    Local produce vendors get visibility.
    Amazon gets leads for popular local products to carry in their stores and gets to condition shoppers to check their site when looking for tasty local food.
    Customers get to learn where to obtain tasty locally produced food via an easy search, with reviews from other customers.

  • I actually do shop there more since the Amazon acquisition, because there are a few products they carry I can't get in any of the several other grocery stores around. They also have decent bagels (New Yorkers feel free to remain silent thanks).

    They have pretty good produce compared to many other options, and aren't even the highest priced place for a number of items...

    They do have a more limited selection though, so I could see if people were sticking to just one or two stores Whole Foods might not be a, w

    • They have ok bagels. Better than most others one can get locally, but not great. And no, I'm not a New Yorker (though I like to visit when I can). Some of their other breads like the French baguettes are IMO very, very good. I like some of their store (365) brand products as well. Good and surprisingly affordable.

      • That's a good point, the 365 stuff is generally better than other store generics.

        I agree about the bread. In fact one of my favorite breads from almost anywhere was there - Sun Dried Tomato Sourdough. That was good stuff... sadly discontinued as seasonal, not sure if it will be black every despite selling out all the time.

        That's one thing that always mystifies by about grocery stores, all the time you see one particular kind of product low or gone, while the shelfs around are totally full. Is there no-one

  • Spoked? (Score:5, Funny)

    by q_e_t ( 5104099 ) on Friday December 21, 2018 @01:34AM (#57840322)
    That's wheely bad spelling.

  • I live literally 2 blocks from Whole Foods and frankly? It's just too damn expensive. I prefer to drive 15 minutes to Costco and buy all of my groceries there. I feed a family, and fruits, vegetables, even eggs and milk, are all super expensive at Whole Foods. I'll only buy there if I am stuck in the middle of the week without a few items.

    • I shop at both Costco and Whole Foods (and some other stores).

      Each has strengths, there are some things only Whole Foods has.

      Plus sometimes I don't want to get 24 heads of broccoli or 10 mangos, I just want two.

      I will say that for fruits like raspberries and blueberries, Costco is really great - they do an amazing job with having pretty good quality and a quantity that while large, is not unmanageable and two people can actually eat in a reasonable amount of time.

      Whole Foods is defniantely not my primary sh

  • They keep trying to "just in time" EVERYTHING and operate without ANY back-stock.
    Basically that's a recipe for disaster. Because you CANNOT model grocery trends on a daily/hourly basis.
    And, even if you could, you're STILL limited by shipping constraints.

    All they're doing is destroying Whole Foods with their "grand experiment".

    That's fine by me. I never shopped their anyways. Too high a smug content in their offerings.

    • Whole Foods was destroying itself anyway, with or without Amazon. It takes a lot of marketing effort to get people to spend a 50%-100% premium price for things. Apple has figured out how to do this. Whole Foods not quite as well.

  • There are a lot of people commenting on shopping at Whole Foods stores... WHICH HAS NOTHING TO DO WITH THE ARTICLE.

    The article is about how Amazon's non-Whole Foods delivery offerings have not benefited from the purchase of Whole Foods.

  • ...it's an easy way to get good prices, quick and easy delivery (especially if you are a Prime customer), and an excellent return policy.

    I'm not sure that same set of factors applies to Whole Paycheck - oops, I mean Whole Foods. A brand that has quality items, but is infamous for being ridiculously overpriced and having a mindset akin to Gwyneth Paltrow (asparagus water for $6 - seriously?)

    I'm sure Bezos will get this sorted - but it may take a while and not be an obvious win for Amazon during that period.

  • it's still Whole Foods at Whole Foods prices. In my case, WF's real selling point are things that either need to be experienced in the real world - like produce or perishables - or aren't available or impractical for delivery like baked goods or their prepared foods. For other things, if I wanted to have them delivered I'd do like my neighbor does and use Peapod or one of the other alternatives at a much lower price point. I can barely manage to justify going to the new WF in my area as it is. And even

  • The number of Amazon Prime members who shop for groceries at least once a month declined ...

    I still go to Whole Foods every week or so, but when they ask "Are you an Amazon Prime member" I answer no. I can't be arsed to pull out my phone, start their app, and show them a code to scan, and I think the cashiers are happy to skip that step.

  • There is a reason they call it Whole Paycheck! Their prices are outrageous this is WHY many don't shop there. Amazon promised to drop the prices by 20% but only did so for a few weeks and then they jumped right back. Whole Paycheck needs to permanently lower their prices as promised!

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