
Amazon Said to Plan Cuts to Shed Whole Foods' Pricey Image - arcanus
https://www.bloomberg.com/news/articles/2017-06-18/amazon-said-to-plan-cuts-to-shed-whole-foods-pricey-image
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GCA10
Hmmn. The entire story is attributed to "a person with knowledge of the
company’s grocery plans." We aren't told whether this is a senior Amazon
executive or an automation-services vendor who sat in on a couple meetings
with a mid-level Amazon team and thinks he/she has the whole story.

Everything in the piece sounds like one path that Amazon could take. But
Amazon also has a long history of exploring a lot of ideas before deciding
where it will commit big resources. Hearing the same scenario from multiple
sources would have been helpful.

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dboreham
You need to know that "person with knowledge..." is code for "Jeff Bezos".

~~~
gumby
At Steve Jobs once put it: "It's a strange ship that leaks from the top"

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Animats
_" Amazon expects to reduce headcount and change inventory to lower prices and
make Whole Foods competitive with Wal-Mart Stores Inc. and other big-box
retailers."_

That's a huge change. You go into Whole Foods, and it's mostly good-looking,
thin people, not the wide loads and screaming kids of Wal-Mart. If Amazon
wasn't looking to go upscale and high-margin, what did they buy Whole Foods
for?

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clubm8
I suspect they'll turn it into Trader Joe's with delivery, not Wal-Mart.

Lower prices, lack of brand names. Think AmazonBasics, but for food. I
wouldn't buy anything important off AmazonBasics, but for cables, shower
speakers, and other minor things it's Good Enough.

If you had to choose between perfect, high quality produce and staples you
drive to a physical store for, or decent (but not perfect) produce you can
have delivered at the same (or lower) cost, which would you pick?

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sureshv
That wouldn't surprise me, last I looked Whole Foods had a substantial amount
of their house brand (365) in inventory. Amazon can just tap into the existing
pipeline and rebrand if needed.

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newzzy
in Belgium Delhaize also has a 365-brand

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epmatsw
Why would you buy Whole Foods to compete with Walmart? Seems like totally
different branding and target markets...

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WalterSear
Because you just wanted to pick up a bricks and mortar chain to populate with
your own stores.

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epmatsw
Seems like there's other brands that you could acquire if that was the goal
(Safeway, Ingles, Publix, Kroger, etc), but maybe those are too big? Anyways,
just seems like a waste to trash the Whole Foods brand when I imagine that's a
pretty solid chunk of their value.

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rainbowmverse
Does Ingles have any locations outside the southeast? I'm surprised to see it
mentioned here.

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epmatsw
That's a good question actually. I was just thinking of nearby grocery stores
off the top of my head.

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edsheeran
Personally, I prefer Trader Joe's to WF. TJ by design stocks FEWER SKUs, has
human (humane) cashiers that can engage you in conversation and know how to
properly bag items. It's the closest thing to European street stands,
excluding of course the American farmer's market which can be so much more
expensive.

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oliv__
Every time I get some vegetables at Whole Foods, some cashier will look at an
item confused and ask "What's this?". Um...Celery...

This has never happened to me at Trader Joe's.

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6stringmerc
Well, here's 37 lbs of free advice, Bezos & Co: Change the name to "Half
Paycheck" to at least be self-aware enough to know why the customers have left
for Central Market, Trader Joe's, and Sprouts. Whole Foods became a parody of
itself. Sure, it took about 10 years, but who are you kidding - the CEO and
Board just sold out to Amazon. I wonder if beard care products will still be
provided for free to employees in all stores...

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nunez
The beard care thing tipped me off. The WORST bath salt I've ever gotten came
from Whole Foods. It was this $25 thing that was super small and smelled
weird.

The best salt? $5 Dr Teals from Walmart: the land of "wide loads and screaming
kids."

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pasbesoin
Not a regular Whole Foods customer, and this is off the cuff, but my distinct
impression with regard to how this will impact Whole Foods' "line" (i.e
"normal") workers, is: Welcome to your McJob.

When I do go into Whole Foods, the staff are always attentive and seem to be
in relatively good moods and well treated. I am sorry for the negative impact
I expect this will have on them.

I don't have a Whole Foods close to me. And, while some items there can be
oddly cheaper, and they further offer a "case" discount that is quite
significant [1], it can indeed be "whole paycheck" for other items and if
you're not comparison shopping.

Which, for me, mostly means comparing with my local instance of a regional
supermarket chain. Not as upscale as Whole Foods, but plenty ok, and a union
shop, where the employees seem to be treated all right. (I know a few of them.
I've heard at least one story about how the union had the back of a worker I
know to be one of their better ones, when some new management douche tried to
screw him over.)

Amazon... Well, my overall impression of Amazon, is that it's a meat grinder,
unless you are one of its "blessed" employees.

We'll see whether they can manage to run contrary to that, in absorbing Whole
Foods.

1) While a friend was in hospice, all she could eat reliably was yogurt, and
she particularly liked one line that the facility she was in didn't carry. I
stopped by Whole Foods and grabbed a bunch, of a variety of flavors --
whatever looked promising. At checkout, the cashier looked at it and gave me
the case discount, without my asking. What should have been a $30+ total
turned into... was it $10, or $15? I had to ask them to repeat the total, as
it was nowhere near my mental math approximation.

Separately, I like Amy's chili. For a long time, Whole Foods was the cheapest
place for it -- even without the case discount. Sometimes, on the order of a
dollar a can cheaper.

On the other hand, some of their produce prices were double or more those of
my local supermarket. Before getting into the whole "organic" question.

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linsomniac
I would love to see some more local Amazon presence, considering how much use
I get out of Amazon. But the Venn diagram of things I get from Amazon and
things they stock at Whole Foods does not intersect.

I would like to see some local Amazon presence, but coming into Whole Foods
and trying to make it competitive with WalMart seems like a huge mistake. I
mean, look at how well WalMart's attempts to move into Amazon's online space
have gone...

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walshemj
Isn't that like buying Marks and Spencer's or Waitrose and saying we are going
to make it like Aldi or Liddle.

If that's Amazons view time to short amazon

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nine_k
It might be a PR stunt to provoke exactly that :) If Amazon is not going to do
anything crazy with Whole Foods, it's time to long more Amazon.

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Spooky23
Sounds like what happens when Oracle buys tech companies.

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kavok
Doesn't Oracle usually raise prices?

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spilk
I'm sure he was more referring to the complete destruction of everything that
was cool about Sun Microsystems when Oracle gobbled them up.

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mc32
I'd like that to mean they will keep the same kind of inventory -quality of
their stock as well as their commitment to sustainability and ethics while
bringing down prices via partnerships and economies of scale rather than by
sourcing "cheaper goods" a la Wal __*Mart which achieved that goal by sourcing
unethically from overseas and dropping local producers.

If there is change in quality of product (and I don't mean their new age
medicine stuff) I'll buy elsewhere.

The other day people were concerned WalMart might bring down Bonobos to their
level --I'm concerned that Amazon might bring Whole Foods down to their level
instead.

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gboudrias
Aaaaand they ruined it.

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peapicker
Starting to downvote all bloomberg articles because their ads stop my music on
mobile when i try to read their articles. Not a new behavior but I'm sick of
it.

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tonylo
Those who don't understand why "Amazon is buying Whole Foods to compete with
Wal-Mart" should read this: [http://loupventures.com/amazon-is-building-the-
future-of-ret...](http://loupventures.com/amazon-is-building-the-future-of-
retail-by-rebuilding-the-past/)

Amazon are not competing with just Wal-Mart. They want to redefine and compete
in all categories of retail.

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JCzynski
What is the value of Whole Foods without its pricy image?

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cholantesh
>Amazon expects to reduce headcount and change inventory to lower prices and
make Whole Foods competitive with Wal-Mart Stores Inc. and other big-box
retailers, according to a person with knowledge of the company’s grocery
plans.

That inventory will have to include GMO foods if they are serious about
competing in that space.

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pavlov
Fractional Foods?

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tuna-piano
Maybe Amazon's competitive edge is that its investors don't demand current
profits, like the shareholders do of every other company. They can price to
break even or lose money.

I think I recall other retailers complaining about competing with a company
that doesn't need to make a profit. It does sound difficult, and it is at
least a bit quizzical that Amazon gets away with it. Then again, their
strategy does seem to have worked.

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devdas
[http://media.corporate-
ir.net/media_files/irol/97/97664/repo...](http://media.corporate-
ir.net/media_files/irol/97/97664/reports/Shareholderletter97.pdf)

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KirinDave
This plan did not go well for Fresh and Easy.

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meddlepal
Sounds like a smart move if they can keep the perceived brand identity for
quality goods. WF has a lot of unnecessary overhead.

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nickthemagicman
Jesus I have a feeling Amazon is a more ruthless Wal Mart with Automation and
way better tech.

I know I'm buying their stock.

