Amazon Purchases Whole Foods For $13.7 Billion (Cash)…

The business world is buzzing over Amazon’s $13.7 billion purchase of Whole Foods. CTH has received requests for opinion. Amazon stockholders may not like the perspective.

(Via CNN Money) The online retail giant announced Friday that is buying organic grocery chain Whole Foods (WFM) for $13.7 billion in cash. The deal values Whole Foods at $42 a share, 27% higher than where the stock was trading Thursday.

Amazon (AMZN, Tech30) said Whole Foods stores will continue operating under that name as a separate unit of the company. Whole Foods CEO John Mackey will stay on to lead Whole Foods, which will keep its headquarters in Austin, Texas. (link)

Here’s my review. Firstly, Whole Foods was available for purchase because Whole Foods business model was limited; and like the progressively minded organization they are – they allowed their Birkenstocks to travel beyond their limits, which always leads to failure.

In the PC corporate world ‘pending failures’ are called “challenges“, or “opportunities” if you don’t want to get kicked out of the boardroom.

Whole Foods is a high-priced (nicknamed “Whole Paycheck” for a reason) grocery outfit specifically because they were/are generally a niche market operation.

The cost of organic products, in combination with their fundamental flaw (Achilles heel) that economies of scale (warehouse and distribution) are a prerequisite within the low margin industry for cost savings, kept their prices high.

As a regional business, inside specific markets with specific access to locally sourced product, Whole Foods would be ok.  It’s their core operations and reason for their initial success.

However, attempt to expand that operational model nationally (which they did), and you enter a dynamic of trying to sell products in markets that don’t appreciate or value the Vichy experience of dropping $300 for two Eco-friendly canvas bags of fruits, vegetables and oddly pronounced olive oils.

High prices are necessarily part of the Whole Foods overall business model. Expand operations beyond niche markets that can afford such prices and, well, failure (ie. their Birkenstocks traveled to far).  That position is exactly where they were.

♦ Enter Jeff Bezos, Amazon and a distribution network with a high-minded belief their distribution can/will enhance the logistic and efficiency challenges encumbering Whole Foods future success.

No doubt Bezo’s gender neutral Latte bean counters found some like-minded suave millennials, complete with man-buns and algae cakes, to deliver a fabulous Apple-powered presentation therein.  Business graveyards are filled with such enamored and well-meaning carcases.

Whole Foods operates approximately 460 stores.  [How many of them actually turn a profit, and hold up the loss leader footprint, is unknown.] Amazon reportedly paid $13.7 billion (yes that’s billion with a “B”) for the footprint.  Or approximately $29.8 million per retail unit.

$29.8 million per store is approximately $10 million more (per unit) than anyone with a modicum of practical common sense would normally pay.  Then again, Amazon is cash heavy, so what’s a few billion amid like-minded latte power-point-pals; and Mackay’s crew of fellow travelers know how to burn cash better than most.  (See Hillary Clinton’s 2016 boondoggle expenditure for reference.)

However, in Bezo’s world, amid the giddy financial generation, money seems to grow on trust-fund trees.  The bottom line of actual profit is transparently non-existent in this $13.7 billion expenditure.  Even with a modicum of success, it would take a generation of successful operations for all 460 units to pay back such an over inflated purchase price.  So, obviously this is not a decision based on bottom line profit generation for the parent company Amazon.

That brings us to the next set of points which lean more remarkably toward failure.

Technology, and more specifically technological mobility, is now creating individual efficiencies in consumer personalization to exceed any investment value that a retailer would necessarily place in infrastructure.

Does that sound like corporate gobbledyspeak?  Good, it was supposed to.

Plain english version – People are assuming Amazon will be looking to generate shop-at-home (direct delivery) value via a synergy of Whole Foods grocery operations and Amazon’s exhaustive distribution network.   [All of the highfaluting Brioni suit and disposable tailored white shirt crews are espousing that opinion.]  Amazon is anticipated to be able to deliver groceries through this acquisition.

In order for that to be a possible future outcome, layers of cost efficiency would need to be the driver of Whole Foods boardroom discussion very soon. Very unlikely.  Apparently unbeknownst to the algae-cake community, the overall industry, as a direct result of the technological mobility of the consumer, is now less invested in such an approach.

Why?

Simple.  Technology is also creating efficiency for consumerism.  It is entirely possible to go on-line for your grocery purchase, submit your grocery list to your local market, and then utilize Über transport as the pick-up and delivery method.  Über and Lyft won’t be just for taxi service anymore…. watch/wait for it.

The all encompassing process of ‘field-to-fork’ within the food industry is poised to break down into various competing sub-sets and sub business units, external to the food retailer.  Again, efficiency of scale and specialization is essentially the driver (no pun intended).

On the upside of angled considerations for Amazon, they are also looking into entry in the retail store market, and with that in mind actual foot traffic is a prime factor.  No industry drives a higher measure of consistent foot traffic than your local supermarket.  So there can be a reasonable expectation that Amazon stores will have some connective tissue to the locale of Whole Foods. [Somewhat guessing here]

However, in the direct-to-home market for grocery operations, specifically because of the aforementioned mobile distribution specialization, the synergy of Whole Foods and Amazon shouldn’t be predicated on a belief such a new market will necessarily emerge.

Yes, the upper-east side, and those of similar refinement, may welcome Amazon delivery of Whole Foods products.  But that doesn’t change the issues of regional limits for such consumer evaluations.  The baseline Achilles heel of Whole Foods still exists, albeit with a possible delivery service.

Tear it all apart and Amazon just paid about $30 million per store for a business enterprise worth about 30% less than that.  There is no reasonable way, from a profit perspective, for Amazon to ever recapture such an expenditure.  Then again, as stated, it doesn’t look like profit is their motive.

That said, as history customarily shows, sooner or later the value of a common stock will not support the best intentions of well worn Birkenstocks.

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709 Responses to Amazon Purchases Whole Foods For $13.7 Billion (Cash)…

  1. alliwantissometruth says:

    My wife & I have been “aware” shoppers for the last ten years or more. We refuse to shop at (as she calls it) Whole Paycheck Foods, just as I won’t use Amazon again

    We food shop at a local mom & pop grocery store, where they have wonderful fresh foods. veggies, fruit, homemade salads, etc. We buy our bread at a local bakery. If I go out drinking it’s at a neighborhood bar owned by a retired Chicago police captain. My favorite sandwich shop is owned by a Chicago fireman. We get a lot of food for the week at a local Irish place that sells incredible dishes

    The point is, support your local business & economy. I won’t shop at corporate owned stores or restaurants anymore. I want to support local American citizens trying to make it in a world filled with online shopping, which lines the pockets of anti-American leftists

    My motto? F*** them. Besides paying a little bit more at times, I haven’t missed anything or been denied anything I wanted shopping at my local stores

    I will no longer be a part of leftist fat cats putting Americans out of business for profit

    Liked by 12 people

    • Mendy Mendelbaum says:

      A nice sentiment but not everyone can afford to pass up the cost savings of national or regional food retailers. I have compared prices locally between mom and pop and retailers and m&p are consistently higher by 30% or more. I understand the economics of m&ps are not the same. But I am not paying a 30% tax for localism. Can’t afford it.

      Liked by 2 people

      • alliwantissometruth says:

        Understood Mendy

        We do it because we can afford it, but I realize it doesn’t make economic sense for many, & I would never put anyone down for doing what makes sense for them

        Liked by 1 person

      • Mary says:

        My budget’s tight as well but there are other costs associated with your corporate crap big box groceries. Lousy, decreasing quality, increasingly substandard staff, who don’t care about selling you past sell by date produce, deli, meats etc, who violated health codes, don’t wash their hands, pick their noses. I stopped shopping at the chain grocery my mom used and I shopped at all my adult life and instead go to a mom and pop grocery. The better quality is worth the extra cost

        Liked by 1 person

    • Deplorable Alpha Vulgarian says:

      Treeper from Chicago… not many of us! You ever wanna get out of there hit me up and I’ll tell you where to move but still be within an hour of that dump.

      Like

      • alliwantissometruth says:

        Hey Alpha. I can’t, business interests keep me in the city

        Like

        • Florence says:

          I’m also in Chicago — Uptown / Andersonville area. Been here for about 20 years. It’s been nice, but I’d rather die than grow old here. I’m leaving for Arizona in the next 3 months or so.

          Liked by 1 person

          • alliwantissometruth says:

            Hate to lose a patriot Florence, but I understand. I was born & raised here, so it’s pretty sad when I see what my city has become. I can’t wait for the day I can leave too

            Andersonville huh? I still go to Calo’s on Clark a lot to meet friends for dinner. Great ribs. But yeah, Andersonville isn’t too bad, except for the parking congestion, but “nice” would be the last word I’d use to describe the Uptown experience

            Like

          • hellinahandbasket says:

            @Florence – Suggestion …Don’t move to Tucson, or any of its sub-areas, it’s become a dump of a city, over taxing to pay for crappy-roads because it was all spent on welfare for illegals, run-down stripmalls galore, rising crime, rising traffic. The only way I see Tucson as a desirable SW city, is if you can afford to live in the Catalina Foothill gated communities, far, far, far from Tucson’s city limits. I moved here in 2004 from E.Coast Massachusetts, and have watched it crumble right before my eyes. Good Luck!

            Liked by 1 person

            • chrystalia99 says:

              You ain’t kidding *sigh*. Been here in Tucson for decades now, and on my side of town it’s ridiculous. Between the roads, the illegals, the general disintegration of serivces and the progressive loons on the city council, I can’t wait to move–have my eye on Alaska. If any Treepers in Alaska know of some decent gold mining claims (or have a claim they want worked) drop me a note LOL.

              The new PTO business on top of the minimum wage increase is going to drive our kettle corn business to the edge of disaster, after over 30 years of making the best kettle corn anywhere.
              But for me, the most depressing change is the libraries–walking into the downtown library and seeing hundreds of running feet of empty shelves says it all–as does the bathroom, now always filthy because the homeless live in the library.

              Like

        • Also from Chicago…. Lakeview area. The only thing keeping me here is my daughter. If she were to move, so would I.

          Like

    • Radiopatriot says:

      Hey there Alliwantissometruth:

      All well and good, if you can do it. But let’s not forget that MANY of our locals are employed by the corporate-owned supermarkets. My local beachside Publix (a smaller version of the larger stores in more populated areas here on Florida’s Space Coast) keeps many of our young people and retirees gainfully employed, eligible for profit-sharing, and covered thru medical insurance.

      So, yeah, supporting local mom & pops is always a good thing, but so is keeping many of our neighbors and friends employed in the larger chains.

      Liked by 2 people

      • Mary says:

        I’ve always consider Publix as somewhat local. They are very good to give back to the communities they are located in.

        Liked by 2 people

      • alliwantissometruth says:

        Good point Radio, but here in Chicago it’s mostly illegal aliens working, & you’re looked down on if you don’t speak Spanish

        Shopping around here becomes an exercise in frustration. Instead of enjoying it, you feel enraged

        Liked by 1 person

        • hellinahandbasket says:

          My Son is a Butcher, and Meat Dept Manager for the local Fresh Thyme Farmers Market in Deerfield, and also takes care of Mt Prospect and Crystal Lake stores in Illinois. I don’t know the area at all, but believe these are NW of Chicago…? He bounces around to get new stores up and running, so his home-base may have changed …anywho ….
          He tells me the prices are off the hook for this retailer, as they are along the lines of WholeFood model of yuppie-catering foods model, but he does tell me they always have high-quality fresh produce and meats (he raves about the meats he purchases). If you go there, ask for Greg the Butcher, tell him you know his Mom from Tucson AZ, and he’ll hook-you-up with a nice cut of Rib Eye! {wink}

          Like

          • alliwantissometruth says:

            Hey handbasket. Yes, you’re correct, those towns are NW of Chicago, & if I’m ever in Deerfield, I just may do that

            Like

      • TPW says:

        Love Publix but they are higher than a cats back…..best bread, deli, and veggies.

        Like

      • chiefworm says:

        Radio, I know what you mean. Publix has always treated their employees like a “family”. My folks shopped there in the second half of the 60’s in TItusville. I bagged for a store in Tallahassee in the 70’s. They were strictly a Florida chain until fairly recent but I believe they have expanded to only southern Georgia and Alabama. I’ve been back on the Space Coast for several years and truly prefer to shop there vice Winn-Dixie or the likes of Walmart or Target. Always feels Mom and Pop”ish” because of the people working there..

        Like

    • TPW says:

      Well I see one possible good outcome from this…….Price wars….and it is High time the price of food comes down…..the price of gas should have made that happen but I recall Sundance article explaining pricing……maybe this will force big chain groceries to cut prices.

      Like

    • AM says:

      When we have more disposable income and more time, that’s in part how we will use the both. 🙂

      Like

    • Dan_Kurt says:

      Read about the Amazon purchase of Whole Paycheck so today I went to one before going grocery shopping. I occasionally do go to Whole Paycheck for specialty items but that is really rare. What did I find and purchase:
      1) Norwegian Fudge Cheese: same price as Safeway and Kroger.
      2) Portuguese Sardines in oil: only store that carries them that I know of so I bought a dozen cans.
      3) Noted that Whole Foods had BOTH Organic and “standard” White Nectarines so I bought four of the “standard” which were about half the price of the Organic White Nectarines. Shared one with my wife and I am sorry I didn’t buy more.
      4) Sampling was being done of Rutherford (Napa, St. Helena) wines, three reds. Bought one that I knew my wife would like (a blend of Petite Sirah, Syrah, and Barbera) @ $14.00/ btl. A not bad price and standard at Whole Paycheck according to the lady doing the pouring.
      5) Store was filled with shoppers.

      I am glad it exists.

      Dan Kurt

      Like

  2. mitrom says:

    To me, the Whole Foods acquisition is another attempt to corner and dominate the retail market. It’s a long-term strategy vs. a short-term strategy. Although Bezos is business savvy in a lot of respects, he’s a slime ball when it comes to politics, especially with the Washington Compost. He turned that paper into pure propaganda and you can bet he’s working under the scene to derail Trump and his Administration.

    These “progressive” business leaders (Bezos, Zuckerberg, etc.) are hypocrites because while they espouse to be for equality and for the little guy, they act like pure capitalists and live off the pain of others. They also think because they are “smart” in their business, that their views in politics are also “smart.” Most of us know this isn’t the case.

    Liked by 4 people

    • Minnie says:

      Agreed.

      While progressives scream that “capitalism” is a crime against humanity, they are quick to profit off of it, aren’t they?

      Liked by 1 person

    • Kaco says:

      That’s because they are global warming zealots that think they are going to save the planet by leveling us all to serfs in their control while they remain overly wealthy.

      Liked by 1 person

    • lacy says:

      Bezos is going to use his WP platform to have hysterics about any EPA deregulating Trump does in hopes that nervous liberals will be more likely to overpay for the organic label as a result.

      Like

  3. fred says:

    Organic food versus regular produced will always be an argument. Like windmills and solar panels great ideas but can’t sustain large populations………A mom who barely makes rent every month will buy the foster farm chicken on sale for .99/lb. instead of the organic costing 10.00 for a whole chicken……..There is a lot of scare tactics too with the constant barrage of this food gives you cancer……….Cancer is stem cells that mutate and most not caused by food but it’s good to source your food. Meat has 5 grades which one are you buying……

    Liked by 1 person

    • jackphatz says:

      To me, “organic” means poop! Not what I’m gonna want for dinner.

      Like

      • Organic means long carbon chain. Organic chemistry is a two semester undergraduate course. It is amazing how many chemical compounds and chemical reactions are “organic”. When someone tells me they buy “organic” vegetables I have to wonder if they know what the word means. ALL vegetables are organic. No blemishes and no worm holes in your “organic” produce means “organic” pesticides were used. That plastic grocery bag virtue signaling enviros love to hate is an organic substance.

        Liked by 3 people

    • TPW says:

      There is definitely a major difference in the vegetables grown by my Grandfather (who used natural fertilizers) then these GMO chemically grown veggies offered in the markets. None of it has any flavor. Have noticed the same with meat sold today. don’t get me started on nabisco who use to make decent cookies….

      Liked by 1 person

      • BAM says:

        Some of that flavor difference is due to the varieties available to the home grower. The commercial growers look for varieties that hold their looks longer and travel well which don’t usually equal great flavor. When I have a garden, I like to grow varieties that are not commonly found in the grocery store. The meat, well it depends on what you’re looking for. The higher grade beef has a lot of marbling which is a result of feeding grain (usually has some corn) to cows. They can’t digest it well so it ends up as fat. Grass fed beef will have a much lower fat content, more like select, and a more “beefy” flavor. My father in law (this is many years ago) would let his cow(s) eat mostly grass and give them just a bit of grain to bring them in for the night (coyotes) which also added a bit of fat to the meat. This last year I bought a local 1/4 that was strictly grass fed and was a bit disappointed, I like a little bit of fat in the meat. It’s tasty, but the steaks need to marinate.

        Like

  4. Katie says:

    I don’t believe Bezos is doing this for financial gain. I believe he’s doing it for food control of the population.

    I just cancelled my Amazon Prime membership and will shop elsewhere. Saving a few bucks here or there, or a few days on the delivery time isn’t worth supporting this evil.

    Liked by 3 people

  5. Brant says:

    From the comments, there are folks (CTH fans all) who like/benefit from the technology and those who like to maintain the sense of independence. Not that the former group is not independent. The online delivery model works for some who may have mobility issues or other. I suppose the good middle ground could be all in moderation. As much as you can and are able financially and mobility wise, try and support local when you can. Smaller grocery is $0.30 per gallon milk or maybe $0.05 per pound more for bananas than walmart, I’ll help out the smaller place. Use delivery when you must. I go to thrift stores. That is my way of donating and keeping the dollar very local. If a grocer is regional to the country, I go there as much as possible. And also, if I must, I will choose something made in Mexico over China……I figure at least it’s our hemisphere.

    Liked by 1 person

    • Lucille says:

      If you buy foreign, buy Canadian as much as possible. A number of the “dollar” stores have items from Canada. Any food item from China is suspect due to cleanliness and fertilizing issues. Canada still has food protection laws in place.

      Plus helping out the millions of Canadian farmers and workers who are not Trudeaubots is always a good thing.

      Liked by 1 person

  6. margarite1 says:

    This is a very interesting thread.

    I was really sick last year and it was a big deal for me to go to the grocery store. I had to hang onto the cart since I could barely walk. Now I love to go to the grocery store especially because I remember when I couldn’t. I try to shop locally owned stores whenever I can to support my neighbors. And yes, I do use Amazon for movies, reviews, and some products.

    During the campaign Trump said that Bezos has an anti-trust problem and I have always suspected that the WA Post is all out to take down Trump. It’s nothing personal, just business for Bezos.

    Liked by 1 person

    • RedBallExpress says:

      Glad you are doing better Margarite1. I remember driving to town the first time in 2 months after a detached retina. I took it real slow but it was like being reborn. The little things you never even think about are the best!

      Like

    • Lucille says:

      For Bezos, business is personal and personal is business. He has a political agenda and will stop at almost nothing to see it come to fruition.

      Let’s all try our best not to give him the money to take out conservatives and our President. It’s hard, because Amazon does have fabulous discounted book and music selections. But if desired items can easily be obtained elsewhere, go for the alternative option. Bezos does not deserve our patronage.

      And as David Seaman said in a recent vid, what’s with that droopy eyelid of Bezos? Is he on something? He’s totally creepy.

      Like

  7. BAM says:

    Very interesting thread here with a lot of branches. The discussion of organic produce vs non, with mentions of gmo thrown in; political and social ramifications; convenience; regional availability; personal preference. The bottom line shows how important food is and how it can and could be used to manipulate people.

    1. Organic or Not? Wash your produce, regardless. Just because a pesticide is rated organic does not mean it is not toxic. Organic practices help soils to remain productive over the long haul and are better for promoting “good” insects. I think there are farmers who employ a mix of practices, and therefore cannot be certified. Getting certified is an expensive process. Small locals can advertise organic if their dollar amount sold is relatively small.
    2. Convenience- You alone can determine this. Some people have time and/or location restrictions. It’s almost always less expensive to cook from scratch, but not everyone has the time or knowledge to do so.
    3. Politcal/ Social ramifications- I see quite a few people resolving to change certain habits to try to achieve some change. If you can seek more local solutions for groceries, whether it’s growing some of your own, seeking out farmers markets or individuals with excess (as sometimes on Craigslist) or as the commenter Mary says she will be offering mail subscription for her citrus, it does reduce reliance on the corporate market and encourage local production.
    4. Lastly, just a comment on grocery stores in general. It appears to me that there are about 3 tiers of stores. The “organic” stores. They usually are more expensive. The majority of grocery stores; their prices are generally in the same price range in their general geographical areas. “Cut-rate” stores, which sometimes are non-union stores, or stores that buy seconds, label changes, or close dated items. Outside of those general groupings, there are specialty stores; produce stands, butcher shops, and ethnic stores.
    I have and do shop at all these type of stores. I have a favorite of course, it is a discount store and for me it is a treasure hunt, entertainment of a practical sort!

    Liked by 1 person

    • Brant says:

      🙂 my third tier store is where I get slightly out of date cereal for $1 per box. I’ll get 20 boxes at a time. I usually quick check the nutrition label. I look for specifics, but the longer the list is the one I get. Oddly, the ones that probably would be found in whole food type places have the least (shortest) nutrition label. I also get seconds of Dove soap and Amish soap from a big box (1,000s piled in the box) at 4 for $1, Dove and 5 for $1 Amish. I’ll buy 20-30 at a time and give some to friends.

      Like

      • navysquid says:

        “I get slightly out of date cereal for $1 per box.”

        Brant…there is no such thing as out of date Lucky Charms or Froot Loops…they never make it to the expiration date…/s

        Liked by 2 people

      • Lucille says:

        For a recent food drive I purchased a bunch of breakfast foods, only noticing later that the dates would have expired by the time the donations were collected. The charity instructions were not to give anything that has a past-due expiration date. So I ate them myself and they were all perfectly good. I’d wager the down-on-their-luck families wouldn’t have cared either.

        Like

  8. CurlyDave says:

    If we are viewing Whole Foods as a specialty grocery store I don’t think we are seeing the “Whole Picture”. What Amazon/Bezos just bought is 460 upscale retail locations, which happen to sell organic/specialty food *right now*. But which also have loading docks, reefers, and parking lots.

    There are hundreds of things these can do and there are enough of them that Amazon can experiment with different ideas in small numbers of them.

    Just off the top of my head:

    1. Compete with Walmart in “order online — pickup at local depot.” There is a lot of merit in this idea. Many people live in areas where packages are not secure on the doorstep and don’t order from Amazon for that reason. Now they can get their packages without exposing them to theft and weather, and pick up a few high margin impulse items while they are at it.

    2. Expand into ordinary groceries.

    3. Distribution centers for perishable/refrigerated items.

    4. Upscale stores where a customer needs a credit card to get in the front door. Amazon is experimenting with this idea already, and now they have 460 location in upscale neighborhoods. No more rubbing shoulders with the hoi polloi.

    5. Who knows what else?

    It wasn’t that long ago that Amazon only sold books online. Today it is one of the biggest companies in the world. I think Whole Foods is going to morph into something entirely new…

    Liked by 1 person

    • Paul Killinger says:

      Now THAT’S what I’d like to see…

      Amazon going up against our nation’s grocery industry, which has HUNDREDS OF THOUSANDS of sales points of all types and sizes (including roadside).

      Good luck with that!

      Like

    • BAM says:

      It’s not a credit card that’s needed, it’s a smart phone. (Have a relative that knows about this.) You still have to rely on someone who may or may not know how to check produce for quality above just seeing what it looks like if you are “ordering” your groceries.

      Like

    • Paul Killinger says:

      And that is in no way to diminish what Mr Bezos has accomplished. Having gotten into an on-line business at the beginning, he was smart and innovative enough to create the most successful sales “niche” of all time.

      Like

    • Deb says:

      I’ve heard several people say that Amazon started out selling books online. I’ve been using Amazon since it started, and one of their first distribution centers is in the town where I went to college. It started out selling everything and anything. It became more popular for selling books in part because of their review system, and by providing an attractive business model to publishers and other book sellers. Of course they capitalized on this with the Kindle.

      Amazon Prime is really what helped it eclipse EBay and really grow. That is in part because of their customer service, returns are easy and they treat their customers well. With the addition of video streaming, they are even competing with Netflix.

      Amazon has always had a little bit of everything.

      Like

    • Theoldbear says:

      Whole Soilent Green !

      Like

  9. jdondet says:

    I don’t know if it was a trend but I have been three Whole Foods markets before. One on the Coast, one in the Midwest and one in the Southwest and they all shared one thing in common. They smelled.

    Like

  10. Paul Killinger says:

    In this vein, I see where Radio Shack recently entered Bankruptcy AGAIN, despite their sale and much ballyhooed partnership with Sprint from a few years ago.

    This is another PERFECT prospective acquisition for Amazon, as they too have some 400-plus “bricks and mortar” stores available for a quick sale.

    So c’mon, Jeff, don’t chicken out now. With all those Billions in cash you’ve generated putting these retail chains out of business, you can pick ’em back up for a song!

    Like

  11. Ted says:

    I almost always enjoy reading these blogs, but this one is filled with non-sensical comments and not all that enjoyable… Mostly disappointing.

    Lots of wishful thinking and short-sightedness in the comments. The article is interesting, but I think most folks on here can’t get past the name…. Bezos.

    Liked by 1 person

    • Paul Killinger says:

      No argument here. Along with his acquiring the Washington Post and turning it into a dressed-up “supermarket tabloid” expressly designed to bring down the Trump administration.

      Like

  12. tonyE says:

    I shop at Costco, Trader Joe’s, Marukai and the local “Persian Palace” down the street where they carry a huge cornucopia of all kinds of stuff. I get my speciality spanish chorizo at La Española. We got a fridge and freezer in the garage and a big built in on in the kitchen, so we plan our food shopping and stage it according to freshness and need. I also have a wonderful vacuum bag machine so we can buy Costco sizes and freeze them individually.

    There are also some very high end local stores for aged beef, cheese, etc… their prices -measured per quality- are lower than Whole Foods. Want to get an aged beef cut from a cow raised organically in San Luis Obispo… delicious in the Sous Vide!

    So we plan it… see?

    The whole point of buying food is to touch it and feel it and only grab what is good.

    I also use Amazon (regardless of the Bozo who owns it). If I want something, often I can have it overnight. For nonperishables, that is. It oftens gets me the best price and it has a wide gamut of choices.

    They even have some same day deliveries where I live… but…. Amazon to me is a place to sit down in the computer, spend some time and then ordering on line while wearing my pajamas and drinking coffee.

    BUT…. Amazon and food? Sorry…. I just don’t see it. I live to carefully choose my food and I like to see browse what is available at the store. Food is tactile, you touch it, you look at it and there just no way to do that on a computer.

    By the same token, if I want to buy Amazon stuff by going to an Amazon “store” then what’s the point of Amazon, huh? Might as well go to Fry’s.

    I guess Bezos has too much money.

    Liked by 1 person

    • uvaldegirl says:

      I prefer to buy fresh food myself – so I can select the ripest tomato – or see what fish looks best that day. But for staple items and if it is cheaper, I could see trying delivery.

      This acquisition will hurt newer organic online stores, like Thrive market – an organic online grocer with members. It follows a do- good Tom’s shoes marketing model of donating a Thrive membership to a needy family per each regular membership.

      Like

  13. georgiafl says:

    Nefarious leftists could wipe out whole conservative neighborhoods and voting districts with a few little drops of bacteria/virus.

    Liked by 1 person

  14. I was talking to a co-worker a few days ago, and we began talking about Amazon and Mr. Bezos. The co-worker said that, years ago, he had purchased a Kindle Reader for his wife. It was just before they were going on a vacation. At the time he purchased it, he realized that it was being sold for less than it cost to build it. He said “Bezos is a moron. You can’t make money by selling below your own cost.” Then he got back from vacation, and his credit card bill came in. His wife had spent most of the vacation just resting on the beach, enjoying the quiet. And reading her brand-new Kindle Reader. Which had the ability, while there on the beach, to download any book that was available on Amazon. So, she would finish a book, and then download another one. And another one. And another one. For two weeks. After looking at the bill for all the books she had downloaded, my coworker said “Bezos is a genius. Sell something at a slight loss, because it will make it SO easy for people to spend more than what you gave up initially.”

    So, as far as the doom-and-gloom of Mr. Bezos purchasing Whole Foods? I think I’ll just wait and see what happens. If nothing else, it will be entertaining.

    Liked by 1 person

    • MaineCoon says:

      Alike Bill Gates. free software if you buy the PC, way back when.

      Like

    • Theoldbear says:

      Nothing new same with PC printers and printer ink. They could give the printers away all the profit is in the ink cartridges….

      Like

      • sixgeese says:

        Used black and white (preferably PostScript) laser printers, except for certain brands, are the best deals. The brands you need to avoid are those that do not allow aftermarket toner cartridges (that is, they require that you buy their own brands by using a cryptographic key). It is easy to figure to figure out which brands to avoid by looking at prices of replacement toners not made by the manufacturer of the printer. Never believe the advertisement that a cheap replacement toner will damage your (cheap) printer.

        Like

  15. I like Whole Foods. They have fabulous prepared foods and take-out.
    For me, it’s a holiday splurge kind of trip. Specialty foods as well. But
    for the everyday? Kroger’s, Safeway, etc. are just fine. I think the deluxe
    food stores are reaching the far reaches of their markets as the neigh-
    borhoods stores are upping their game and marketing strategies. Who
    in the hell buys cous-cous on a regular basis. Pleeease.

    Like

  16. Monkey says:

    As Sundance alluded to, profit is not Amazon’s primary motive. My opinion it is about acquiring more data. The data large tech companies collect off individuals is the gold they are after (Google, Amazon, Facebook; starting to wonder about AT&T now).

    Look at how Google answered reporter question on if they would sell data they receive from self-driving cars. If a drugstore company has poor sales, they can pay Google to tell them how many cars are at each store and at what time based on the cars they have driving by. The amount of data it collects for Google is astounding. I think it’s over a terabit/s; can’t remember exact units.

    AI is only a good as the data you have for it to learn / improve from. All the big boys are chasing this. Excluding any benefit AI would produce, the data collected possess a carnal knowledge applicable to many disciplines in life. Banking industry was quick to catch on. If you are in real-estate you can see where the best location to rent property. If you are a car dealership, you can look a microclimate to decide how many cars to order or where to ship majority of new inventory. You could also spot new market trends like natural gas decoupling from oil price.

    How would you evaluate or price the sale of this information? How much money could you make on Wall Street knowing direction of a commodity move? Buffet did it the old way; buy a railroad company and have assurance Gov will not approve pipeline.

    Newspaper displaced clergy as the 3rd branch of power (i.e. kingmakers). At this time, entities who own the data appear to be positioned to become the new kingmakers. It is a very dystopian future.

    Liked by 1 person

  17. margarite1 says:

    Amazon Restaurants! Just got an email from them:

    “No reservations required.

    Where to dine on Father’s Day? One option is the same place Dad’s favorite chair is—at home. Why battle the holiday crowds when we can deliver his favorite meal to his happy place?

    New to Amazon Restaurants? Save $10 on your first order when you enter promo code 10EATNOW at checkout.”

    Hmmm…where does it end? I’m thinking a long way from where we are now.

    Like

  18. Sundance, this is one very well-written article, fully of clever wit. It begins with “they allowed their Birkenstocks to travel beyond their limits” and only gets better from there.

    Solid analysis too.

    Another danger: having spent a generation damaging or destroying brick and mortar businesses, Amazon is now purchasing– wait for it– and over-priced brick and mortar chain.

    In any event, Amazon is too big, has too many conflicts of interest, and is distorting too many markets in too many things to be allowed to continue in its present form without harming the national interest. It is a globalist creature of The Swamp.

    Like

  19. FiveShooter says:

    First, Mackey won a landmark Supreme Court challenge – go look it up. Second, He was one of the first first to introduce the public to a wide variety of craft beers that didn’t look like or taste like carbonated water crap sold by the brewcorp mafia. Third, WFM treatment of their employees is stellar. Fourth, his latest stores are marvels of ingenuity. Fifth, he is a member of the long line of successful Texas businessmen.

    Like

  20. Trent Telenko says:

    Sundance,

    Others have a different opinion on the matter.

    In specific, the Alexa voice ordering system, combined with Amazon Prime membership same day delivery may mean mean Whole foods might have a really interesting distribution system upgrade.

    See —

    http://pointsandfigures.com/2017/06/17/amazon-buying-whole-foods-will-cause-more-ripples-than-you-think/

    I’m thinking more along the lines that Whole Foods stores might make interesting heliports for Amazon’s future multi-copter delivery-drone fleet.

    Draw a 5-mile circle around those 460 odd stores and think in terms of 60 minutes or less grocery delivery times.

    Like

    • Trent Telenko says:

      One more thought — Amazon cargo drones would not be limited to just delivering Amazon’s goods.

      Amazon sells 3rd party vendor items all the time in competition with on-line places like e-Bay.

      There is no reason that these future Whole Food’s ‘Drone-Ports’ can’t deliver other people’s stuff in an hour or less.

      Amazon could actually drop by a local pizza place (insert name here) with the right transponder and GPS coordinates to deliver anywhere with a smart phone “knock at the door” to tell you the pizza is outside in a box waiting.

      Like

      • 4sure says:

        It looks like the future will mean you can be birthed at home and live the rest of your life w/o ever having to set foot outside. We can visit anywhere in the world through virtual reality viewers, have virtual experiences, get a opposite sex robot for companionship, etc. I don’t think based on this scenario that investing in driverless cars will be very profitable as we won’t need them. Drones and driverless trucks for deliveries makes those two much better investments. I suppose you could send your driverless car to pick up the items you ordered on the internet or to send the pet to the vet.

        Like

  21. Tim Tarr says:

    What was really interesting was stock reaction by other retailers. Do you believe Amazon will put Kroger out of business. Walmart has been doing groceries for years. Most of Wal-Mart’s groceries are higher than Kroger and other “local” stores.

    If it was brick & mortar thing. There are plenty of Sears and K-mart buildings that can be had at a discount. Even former Macy’s are available. That’s the one’s off top of my head.

    A fool and his (others) money….
    Just an incestious fling between liberals. Tesla and Solar City come to mind. When these come crashing down they’re going to blame POTUS.

    Just can’t fix stupid.

    Like

    • Mary says:

      LOL
      not laughing at POTUS but everything else you said.

      Like

    • Just had a thought: There are a lot of big malls that have become empty. Would be a great place to put in distribution centers in cities. Lots of parking lot space for big trucks to come in. Convert some of the smaller stores to drive-in pick-up of orders. Lots of roof space for drone-delivery of goods to the local area. Sounds silly, but it sounded silly to sell books out of a garage, too.

      Like

  22. Jimmy Jack says:

    That’s Upper East Side or UES to you sir.

    Lol

    Sorry, that’s what growing up there does to one.

    Like

  23. Jimmy Jack says:

    I have to read through the comments later but I have a question for Sundance and you knowledgeable Treepers.

    What would your advice be to a person looking at a middle or upper management position at WF corporate right now? I have a friend who’s looking at this situation and I’d love to know if your analysis on this particular situation jibes with mine.

    Like

    • Mary says:

      Worked with WFP/MACKEY since he started in his garage back in the 70’s he pays his people very well, job can be demanding but benefits were good with WFP but when you throw in BEZO’S I’m leery of him. Did you happen to catch an interview he did when he was spouting off about Americans being lazy?? If things go sideways in this country and those fool globalist could ever get a bill such as TTP into law he would import all of his workers and use them as slave labor. Bezo’s at this time is an unknown?

      Like

  24. Bubba says:

    The left wing type of people that shop at Whole Foods want to be seen there. They want to show how sophisticated and cultured they are by shopping gourmet & organic & social awareness & sustainability. It’s the Starbucks of Grocery Stores. Same mentality. They’re not going to want their groceries delivered. They want to be seen and validated by the visibility among peers. lol

    A couple of years ago, when contemplating the replacement for David Letterman, Les Moonves of CBS stated that ratings aren’t important anymore. The content is what was important now.

    Could it be that profit isn’t as important as protecting the liberal, social doctrine that is represented by Whole Foods? Besides, that $600 million from the CIA is fungible.

    Like

    • freddy says:

      I was a chef for 45 years and bought many millions dollars worth of foods. These people know nothing of what they talk about. I just listen and inside laugh at them. Thier websites are all so stupid it hurts. So yep your right it’s a place to bee seen as you spout off whats good for you. Meanwhile the old grandma is 102 and has couple shots a whiskey a day and eats steak……

      Like

  25. H.R. says:

    Commenters have brought up the potential for drone deliveries of groceries, but I don’t know that the drones would be able to deliver a case of beer and a case of cola along with the ice cream. What is the weight limit before drones get to be the size of Sikorsky sky cranes? Will the ice cream you order in July from a Phoenix store arrive in its intended state?

    Also, there’s the weather; if the weather is bad enough to cause someone to forego a trip to a store, e.g. a blizzard, won’t the weather be too bad for drones? When drone service is needed most, will it be available?

    Like

  26. no-nonsense-nancy says:

    it is my opinion that if you have even a little bit of space you can and should grow your own food. It can be done even in small spaces. You should grow up to save space. Roof top gardens are a big deal in urban areas. Co-ops are good too for people who have limited time. Garden sharing is becoming popular. Many cities are using rundown areas or empty lots and allowing residents to plant gardens on them..There are many different opportunities for eliminating the need to purchase food.The internet and especially you tube are great for finding out how to do things if you are new to it.

    Liked by 1 person

    • freddy says:

      It’s a social outing to go to the farmers market here and walk around and say hi and get some great homegrown vegies and citrus………..

      Like

    • Kaco says:

      My mother, grandmother, and aunts all had backyard gardens. When we moved to the country, my mother had a huge garden and did lots of canning. Never had store bought spaghetti sauce, jellies, or jams growing up. After my parents became empty nesters she stopped, said it wasn’t worth the work nowadays. I never got into having a garden but have been thinking about it the past couple of years, especially since strawberries are full of pesticides and organic is like $6 for 16 oz.

      Like

    • janc1955 says:

      May not need a lot of space, but definitely need a lot of time. Something many of us are short on at the moment. Hopefully one day I’ll be able to retire, and I’d LOVE to have a little patch of earth to experiment with. 🙂

      Like

  27. Years ago, I worked in the performance Horse Show business. When someone had a Hobby Business, like owning horses, to be able to write off their loses on their taxes they had to show a profit at least one year out of every seven. So every six or seven years, one owner would buy another owner’s horse for whatever price they needed to show a profit for that year. Then that Hobby Business owner could keep writing off his loses for another seven years. That owner would return the favor when the other guy needed it (sweetheart tax deals).

    Could something like that be what happened here?

    Like

  28. freddy says:

    I studied whole foods before opening a competitor store. The real deal is the markup is just crazy becvause of the huge waste they incur. Your paying for the trash bin. Same as vitiamins and supplements. Like milk thistle they say helps the liver or cures diseases. It does not in any way and there is no proof besides it costs 1.75 for a bottle you buy for 18.00 dollars…… Same with soaps and stuff……….The days of whole foods are numbered………..

    Like

    • Kaco says:

      Milk thistle could also keep things circulating and could cause toxicity because it’s prevented from being processed in the liver.

      Like

  29. freddiel says:

    Maybe Bezos is going to start a home delivery system like “Hello Fresh” or “Blue Apron”.

    Like

  30. Kaco says:

    No to mail order groceries. I like to pick my items out, especially produce and meats. I also shop sales and use coupons. I haven’t felt the need to join Costco or Sams because the sales in local stores are good enough for me.

    Like

  31. jojo says:

    I will NOT support BEZOS for anything. He bought the WaPo as a play thing to spread his global elitist liberal philosophy. I’m careful with my $$ and to whom it is supporting. I buy ALL my food organic from farmers mkt or coop’s. I’m actually one of the few who shave their legs that shop at the coop. Just saying.

    Like

  32. Trumpire says:

    I can’t help think that Bezos is thinking of creating a whole functioning body (as it were).

    I would guess he’s not trying to get into the food business. The food business is just part of the Frankenstein monster he’s creating that will undoubtedly make his purchase of the food business seem shrewd in hind sight. If his history of success and disrupting business models is any indicator.

    So if you compare food business to food business, of course it would appear to be a stupid purchase.

    But if you think of it as buying a part needed for your fully functioning Frankenstein monster then the pricing is not apples to apples but apples to oranges.

    I think world domination is his ultimate mental goal. It’s probably all just a big game to him at this point and he wants to win the game.

    Like

    • Trumpire says:

      In other words, he’s not buying a food retail chain he’s buying a needed organ for his Frankenstein at what he deems a very, very good price – to him at least.

      Like

  33. jeans2nd says:

    Forbes thinks this Amazon purchase of Whole Foods is just dandy.
    https://www.forbes.com/sites/groupthink/2017/06/16/how-amazon-just-changed-the-800-billion-supermarket-world/#5c70e66b6697

    Maroons. People stop for FRESH food on their way home from work, at either the local grocery or, more recently, in a drive-thru pick-up at Walmart, Sam’s Club, or other local store with an online pickup app. Some people will use those Uber/Lyft drivers to pick them up from work and the fresh food at the same time.

    People also shop at a local farmer’s market or swap meet on the weekends. Yes, even in Ca and NY.

    The key word is LOCAL. Eco-friendly, locally sourced, sustainable, pesticide/GMO free, both food and people. Don’t forget the Birkenstock mindset. That may even be the most important factor.

    Now imagine the Amazon Uber/Lyft driver leaving your FRESH food sitting on your porch all day, waiting for you to arrive home from work to refrigerate that preservative-free-no-longer-fresh food.

    Bezos is sooo behind-the-times. Bezos is now officially a fossil. Mebbe Bezos could donate all those Whole Foods empty stores and shopping carts to the homeless.

    Like

  34. Eileen says:

    Whole Foods is an example of a business that requires upper income customers, who will spend on organic food and high end meat. What I find interesting is that stores like this start losing customers as the progressive agenda they back so vehemently starts working its way up the income ladder; soon they are no longer viable. I’m not sure why Bezos bought Whole Foods. Some people wonder what will happen to the store as Bezos specializes in offering products made anywhere but here.

    Like

  35. Lulu says:

    Don’t know if this really happened, but Michael Savage said that Bezos had dinner at the White House the other night. He implied that our president had made some sort of deal with the owner of the Washington Post. He made it sound very corrupt. I hope he is wrong!

    Like

  36. telerider says:

    As was the case at Apple with Jobs and Woz, when the Board of Directors thought those two guys were starting cost the company (shareholders) a lot of money, they were tossed out on their ear. Perhaps the Board at Amazon may start to question the premium price paid for a business Bezos knows nothing about and paying all in cash and not stock/cash at a minimum. Whole Food customers loved Mackey but may not love a giant conglomerate and the usual cost-cutting measures to try to get a prompt return on their purchase.

    Like

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