
Why Amazon Is Such a Threat to the Grocery Industry - kposehn
https://www.theatlantic.com/business/archive/2017/08/whole-foods-amazon-prices/538002/?utm_source=atlfb&amp;single_page=true
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dcole2929
The reasons Amazon is dangerous in every consumer industry dealing with
physical goods are the same. Logistics and a multi billion dollar war chest.
Amazons logistics solutions are unparalleled. If Amazon can make Whole Food
more efficient shipping goods and gain even a single percentage point in
profits that's huge. And the billions they have to play with means they can
afford to be more aggressive in pursuing market share, and riskier in pursuing
additional revenue streams. If you're subsisting on 1.5% margins you literally
can't afford to bet on something new and it not pay off.

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beautifulfreak
How much does advertising and marketing add to the price of products in
grocery stores? Can Amazon reduce that extra cost by reaching people in new
ways, or by creating its own brands? Store brands are generally pretty good
and cost less. Maybe it's food manufacturers that should be worried, not
retailers. The premium one pays for advertised brands might become a thing of
the past.

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petra
So Amazon is such a big threat because it promises(via PR) to make organic
food cheap enough for everybody ? A task that doesn't sound very realistic ?

How reliable is big company PR anyway ? how much of those big declarations
come to be ? and how much is just for the ears of the stock market ?

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milesvp
Organic food is already becoming cheaper due to it being available even at low
end grocery stores. Whole Food's margins have been falling for years due to
this fact. What I find interesting is that Amazon intentionally keeps their
operating margins at 4%. This is a reason they are very hard to compete with.
What I find interesting about the grocery purchase, is that most grocery
stores have very small margins already, and I wonder how much this signals the
beginning of Amazon buying into lots of other low margin businesses.

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sharemywin
Or another possibility is whole foods becomes a huge drag on the company
especially the AWS area and google, Microsoft and others start taking share
from them.

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sharemywin
can't see a lot of grocery companies wanting to stay on AWS.

