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Amazon to Acquire Whole Foods for $13.7B (bloomberg.com)
1687 points by whatok on June 16, 2017 | hide | past | web | favorite | 824 comments

Oof. I wonder what this means for Whole Foods culture and employees.

If you don't know, John Mackey, the CEO / founder, is a major believer in conscious capitalism and of empowering his employees.

Whole Food employees get paid pretty darn well with some crazy good benefits for their industry and line-of-work (UNION FREE most of the time too!).

WF banks on them being true believers and motivators of the cause - including dedicating a fair amount of paid time to trainings. I've heard mix stories about how Amazon treats employees. I wonder how that will mesh.

So I guess I'm asking:

* What is going to happen with employee culture?

* What is going to happen with all the "Fair Trade" deals WF has in place that might not be the most economical decision now?

* Here comes store automation and hefty lay-offs?

Source: Worked at WF for 3 years

It's nice to see non-union employees treated well and paid well, not because of any negative feelings toward unions or unionization, but because I think it shows that you can be a successful capitalist without trying to suck every ounce of productivity and profit out of your lowest-paid employees.

In the 1880s Bismarck increased the modern welfare state (it was called State Socialism https://en.wikipedia.org/wiki/State_Socialism_(Germany) ). The idea was that, if the poor people can get some form of social welfare from the existing state, they're less likely to support a proper socialist/communist revolution. Sounds like that. People won't unionise when they don't think they need to.

This is a great discussion of company culture, treatment of employees, worker cooperatives, etc., but I hoped HN would go deeper into the business and technology implications.

What is the strategic logic behind this move?

NYT, WaPo, WSJ, Bloomberg all take the same line: this is about Amazon's expansion into brick-and-mortar retail. They need a physical footprint, knock out Instacart for delivery, accelerate Amazon Go, and so on.

But is this really Amazon's play here? Seems to me this is just the superficial and obvious rationale, and these analysts completely missed the bigger implications.

Since Amazon said they're not renaming the stores, how can this be about Amazon's brick-and-mortar expansion?

Seems more likely that Amazon's strategy is actually the opposite of this.

Instead, maybe the bigger opportunity is to "Amazonify" a good brand, good people, good merchandising and thousands of relationships with good suppliers.

Customers already trust Whole Foods and they like the assortment, but (1) only a small percentage of the population has access to a store, and (2) an even smaller percentage of the population can afford it.

What if this is about taking the Whole Foods concept online in a big way ... make it dramatically more efficient, aggressively lower prices, and deliver all this goodness to a far larger percentage of the population?

Whole Foods market share is less than 2%. Amazon could turn this $13 billion business into a $130 billion business by plugging WF into Amazon's existing apparatus for merchandising, pricing, inventory control, online sales, logistics, and direct-to-consumer delivery.

Taking WF market share up from 2% to 20% is a much bigger opportunity than going the other direction, and just using WF stores to sell Amazon's grocery assortment.

It's worth pointing out that the purchase, as based on today's price action, was effectively "free".

Amazon market cap went up 3.5% as of the current tick, roughly $15.5B. The market effectively rewarded AMZN for the transaction far beyond the actual $13.7B tender offer!

No, they are paying in cash, not stock. The company sold the stock a long time ago, so whatever the stock does has no impact on the company. The stockholders, however, benefited 3.5%, assuming they sell now.

This is not accurate. Companies hold back some stock during their IPO for various reasons. Amazon held back 23 million shares. It also has repurchased a fair number of shares it holds as "treasury stock" on its balance sheet that appears to have netted them a few billion in appreciation.

This of course pales in comparison to the 478 million outstanding shares, so, you are correct: their shares don't appreciate nearly enough from the $15 billion surge in market cap to pay for the $13.7 billion purchase. However, to say "whatever the stock does has no impact on the company" is also inaccurate.

Sure, but they aren't taking advantage of this rise unless they sell more stock, right.

Stock price is fungible (with good management) - the increased value can have effect elsewhere.

The cash itself is owned by the shareholders.

No, the cash is owned by the corporation. The shareholders own the right to participate in corporate governance in the degree appropriate to the particular shares they own, and own the right to take ownership of a particular share of the net assets if and when the corporation should be dissolved.

They do not, either in theory or in practice, own the assets of the corporation while it exists.

This is synergy. The market thinks that WFM + AMZN together as one is worth more than the sum of their parts. I should hope so.

"effectively free" is a strange label to give this.

That is a great observation. Something like that is unimaginable to me.

You've got to be able to understand it, though, to make sense of market capitalism. Basically if the stock went up the price of that acquisition plus two billion dollars, that is a very powerful price signaling and a difficult command to disobey.

It means there's an opportunity cost: all other things being equal, it would cost Amazon two billion dollars in market capitalization to NOT do whatever the hell Wall Street THINKS they're going to do with Whole Foods.

Maybe the market thinks they're going to use them as bases for grocery distribution: reward, the cost of acquisition plus a bonus two billion. Maybe the market thinks they're going to gut the company, fire everybody, and then there's one less competitor for what Amazon means to do with groceries! Maybe the market thinks they'll take the existing Amazon grocery stuff and rebrand it Whole Foods and the rabble will buy into that for a time.

The point is that this money really isn't free: it's conditional on whether Amazon does what the investors think they're gonna do, with the acquisition. If Amazon fails to do that, the market capitalization can evaporate.

My own hunch is that the market thinks Amazon is super efficient and acquisitive, and that Whole Foods is weak and inefficient and misguided. As such, the expectation of greedy and amoral investors is that Amazon will take over and whip Whole Foods into shape, maybe even fire everybody and replace 'em with Amazonians, and that will make Whole Foods 'better' and justify the exercise. They certainly aren't buying into Whole Foods' 'enlightened' memes: that has no place on Wall Street.

So I'm guessing it's BECAUSE Whole Foods has been 'enlightened' that the prospect of wrecking that so motivates investors. They figure that the Amazon way is clearly the winning way, and they figure there will be a BIG difference in how things are done, and it's a difference they characterize as 'good for capital', so there's a synergistic effect that makes it 'free' for Amazon plus a bonus. And then Amazon is obligated to do what's expected of them, which I think is probably kinda predictable.


To me I fail to see the value because Aldi is here and expanding and now Lidi is following. while they may be on the opposite end of the market from Whole foods I do think they are where the market will truly end up. The middle to higher end grocery stores are going to face a tough time with the discounters and we have yet to see if the European model of grocery can covert a large number of shoppers.

with regards to the purchase I can imagine cobranding or in store only advertising. perhaps they can use it let people pick up orders themselves? Online grocery ordering but only where a Whole Foods store is available.

The value is that Aldi is nowhere near here, and Lidi is completely un-heard-of.

The only reason I know about Aldi is that I spent a couple of years working in Chicago (and living further out), and even there I had to drive a long ways out of my way to find an Aldi. I think I went once in the 2 years I was there.

Whole Foods is everywhere.

Well, I'm wrong. There are ~430 WF locations worldwide; there are 1,600 Aldis in the US. it's just that aside from southern California, they don't seem to have a lot of locations in the West. My closest Aldi is ~550 miles away; my closest Whole Foods is a lot closer.

FYI Aldi also owns Trader Joe's.

EDIT: apparently I was effectively wrong, different Aldis:


No. There is no Whole Foods within 100 miles of me, and I am in the continental US.

> Customers already trust Whole Foods and they like the assortment, but (1) only a small percentage of the population has access to a store, and (2) an even smaller percentage of the population can afford it.

> What if this is about taking the Whole Foods concept online in a big way ... make it dramatically more efficient, aggressively lower prices, and deliver all this goodness to a far larger percentage of the population?

Efficiency and cheapness would go against the Whole Foods brand.

> Efficiency and cheapness would go against the Whole Foods brand.

For their existing customers, yes, but WF has become an aspirational brand.

What if the play is to gain a large number of less affluent customers by WF-labeling lots of inexpensive things?

Search Amazon for some commodity like corn meal, or rolled oats. There's a huge price difference between Quaker brand and Bob's Red Mill. Amazon could insert Whole Foods brand right in the middle and skim customers from both ends while maintaining handsome margins.

Only if you erode their core customer values and degrade the products. I find it easy to imagine a more streamlined business with more affordable prices in Whole Foods. Why not?

What if you increase efficiency and cheapness in non visible areas that customers don't get to see?

> Efficiency and cheapness would go against the Whole Foods brand.

I don't know what this means. The WF experience has nothing to do with these things. The price (cheap or less-than-expensive) and efficiency (I think you mean availability?) aren't really important, other than they are successful in the same way Trader Joes is successful, in fewer locations.

Agreed. My first thought was: "Sweet, now prices will come down, WF stores will probably have come out with some innovations we didn't even know we needed but then won't imaging living without and overall customer experience will be awesome." They're going to figure out how to take WF to the next level.

> Since Amazon said they're not renaming the stores, how can this be about Amazon's brick-and-mortar expansion?

Sure they say that now...

I don't think anyone thought that Amazon would rebrand the stores. I think what you wrote is the obvious thing to most observers.

Interesting comparison. In this case, people aren't unionizing for essentially the opposite reason. Rather than state provided social welfare, their needs are satisfied through this capitalistic solution. Employees are empowered and rewarded through their work.

It is important to note that the antagonism between union and management is especially bad in the U.S. Germany demonstrates one arrangement that generally works to align the interests of the two.

Just calling this out to try to counter the tendency of U.S. folks to assume that there is only one, unchanging form of capitalism. In fact, ours is increasingly a weird outlier.

What is that arrangement? How are their interests aligned?

Unions have a board seat in larger SME's as well as much greater clarity on internal plans and finances.

Makes hard decisions easier since the union and employees can see why decisions are made.

Organized labor is treated as stakeholders in the enterprise vs a counter-party in the US.

If a certain amount of workers agree they can form a workers council which is a legally protected union within the company. And they have much stronger legal rights, seats on the board of directors, legal requirements to see certain documents, strong protection against being fired.

Lest you think this makes the country uncompetitive, Germany still makes cars, and the UK (which doesn't have this legal system) has vastly de-industrialised and doesn't make cars.

I'm not sure if you can call this capitalistic, though. WF as a commune could likely share many of the benefits or exceed them even without requiring shareholders to satisfy. Instead, a devotion to profits will ensure they are given the minimum to execute their job well.

It'll be interesting to see what bezos does with it for sure.

name a single commune as successful or operating at the scale of Whole Foods or Amazon. in history.

Switzerland's 2 largest supermarket chains Migros[1] and Coop[2] are structured as cooperatives, generating yearly revenues of ~28 billion CHF, each.

[1] https://en.wikipedia.org/wiki/Migros [2] https://en.wikipedia.org/wiki/Coop_(Switzerland)

Mondragon corporation has existed in spain since the 1950s as a worker-owned cooperative and employs about 75,000 people. Whole foods employs about 91,000 but I'd say that puts them in the same ballpark. You could argue in addition that Mondragon has been limited by a) Spain having been a dictatorship until the 1980s, b) the relative youth of the EU single market vs that of the US leading to a more regional business culture and c) the additional language barriers in Europe that make business expansion a bit slower than in the US.


Not exactly a commune, but interesting nonetheless and on the same scale as Whole Foods (12 bln Euro turnover):


Oneida is (was) the closest US analogy I can think of, though much smaller.

There are some very successful Kibbutzim spinoffs in Israel, into 100s of millions US$ (I don't know how ownership was structured).

I also immediately thought of kibbutzim, just as a counterexample for debate. (Full disclosure: ex-volunteer)

From Agriculture To High-Tech: Meet Five Kibbutzim That Became Global Powerhouses http://nocamels.com/2016/03/successful-israeli-kibbutzim-ind...

Could you expand on the Israeli firms?

Are they essentially large family-run houses of commerce much like tradesmen guilds of the past?

Well, Publix is employee owned, does that count?

Comparing the wikipedia sidebar shows Publix with more stores, revenue, and over twice the number of employees.

https://en.wikipedia.org/wiki/Publix https://en.wikipedia.org/wiki/Whole_Foods_Market

I'm not going near Amazon, though.

Employee-owned means the owners retired by selling the company through an employee stock purchase plan. Publix, Woodman's etc. are good places to work but they aren't communes or cooperatives.

Fun fact: Publix is the largest employee-owned grocery chain in the US.

In the U.K. both the Co-op (a consumer owned co-operative) and John Lewis/Waitrose (a worker owned partnership) have similar revenue figures to Whole Foods.

The funniest thing is that John Lewis/Waitrose is an upmarket supermarket.

Whole foods is vastly larger than the majority of organizations world wide. Remember the world GDP is only ~80,000 billion so there is a rather small number of Organizations with 10 billion per year in Revenue.

But, if your just mean billion plus dollar orgs then something like : https://en.wikipedia.org/wiki/United_Farmers_of_Alberta is an interesting comparison. Further, measuring the success of such organizations is hard especially when they are not trying to make a profit. I mean how do you measure something like the US Democratic and Republican parties?

Italian Coop: https://en.m.wikipedia.org/wiki/Coop_(Italy) About the same as whole foods revenue. At this point you have quite a few communes operating at this scale.

Why? What's your point? Just sayig you can't possibly pin the benefits on capitalism—you know very well whole foods would avoid hiring anyone if they didn't have to. That is capitalism: minimize loss of money.

Whole foods is a good employer IN SPITE of being capitalist.

There is a competitive advantage in having real loyalty from employees. Treating people well makes them want to be loyal.

Even Walmart has started realizing this. It turns out that when you hire unmotivated people, pay them as little as possible, screw them on medical benefits, pay them too little to get their own apartment and in general work them harder than everyone else in that job sector that you get people who don't do a good job. In the past several years, Walmart has instituted new wage plans, better medical benefits, productivity goals from corporate that are still unreasonable but not insane and they think it is worth the money.

I don't know if Amazon has learned this expensive lesson, but a business can run with high employee turnover and dissatisfaction for a long time before it catches up to them. Once it becomes apparent it is often too late to fix without losing heavily in the marketplace.

There may be competitive advantages to happy employees, but there's always a cost, and capitalism is about minimizing those costs. Again, if a business could get away with it, they would simply not hire anyone to keep costs down.

Simply put, human welfare is directly in contest with maximization of profits. This occasionally can result in being paid well—it's cheaper than hiring two people at a lower rate.

Seems like the idea was "Whole Foods as a commune" i.e. viewed as a commune. In other words a conceptual lens through which you could view any organization. Amazon itself is a commune in some ways, and so is Whole Foods; therefore my two examples. in history. are Amazon and Whole Foods. So much for that.

And looky there, other commenters supplied a bunch more (actual) examples. I'll throw in: The Catholic Church. The nation of Yugoslavia. What the heck: the Hell's Angels. Far outstripping Amazon's "scale" in terms of heads smacked with wooden fenceposts, that's for sure, or maybe not.

Which is my next point - adjust the "scale" appropriately (and unfortunately you left no indication RE: scale of what, whether it be dollars in sales, people involved, people served, ham sandwiches set aflame, heads smacked, or dogs painted blue) in proportion to the amount of money/wealth existing in the world at that time. in history. or to the number of people alive at that time. in history. and that'll probably turn up a bunch more examples.

There's also the question of "successful at what"? At providing for its employees/members? At serving its customers? At enriching its shareholders? At painting dogs blue?

Also we should really make passing mention of the waxing and waning support for capitalistic enterprises vs. other types of communes in various places and times. in history. Is it a valid comparison between a company like Amazon, operating in one of the most capitalism-friendly sociopolitical environments (post-Reagan America) seen in some time, vs. another type of organization operating in the same environment that doesn't support that organization or even actively suppresses it?

Your comment reflects an overabundance of confidence in things that are by no means simple or certain.

What's not capitalistic about it? A company can be setup with any number of metrics that determine success besides just pure profit. That most don't is a matter of who is running them, not that capitalism doesn't allow it to take place!

Look at airlines--exec bonuses used to include metrics such as "customer satisfaction" and today those metrics are gone and only profits count. Nothing changed with capitalism, though. It's the asshole MBAs that changed.

I mean if you think about it, Unions act as a protection mechanism. If your workplace is already labor friendly you feel less of a need for Unions, which cost money and time.

Prussia was also a highly militaristic state, so it had the side benefit of keeping the young men fit and hearty enough to get conscripted for the next time they needed to bloody France's nose. It would also have the young women fit enough to bear many much young men that they could conscript into future wars.

The logic of trench warfare era militarism is even more depressing than the normal logic of war. It's mind-boggling to think leaders figured it was appropriate to just throw demographically significant numbers of 16-20 year old boys into a meat-grinder just to keep the machinery of colonialist industry well greased.

Very good points. To be a bit pedantic (this is HN after all), trench warfare didn't start until after Bismarck. Truly depressing logic though.

No, trench warfare predated Bismarck, although it didn't peak until after he died. Vicksburg and Petersburg are good examples from the U.S. Civil War.

Exactly the reason why there aren't any Software Developer Unions these days.

You're kidding, right? Programmers are decently paid but should strike for a 40-hour work week.

I work 40 hours a week. Sometimes I work 45, and I usually offset it by cutting it shorter the next week. I have no need (or desire) to "strike" just because some businesses/orgs/teams are garbage.

No competent programmer I know has to work 40 hours a week to have their needs met. The best ones charge rates would allow them to have their needs met working <10 hours a week.

First of all, what does that have to do with ANYTHING being discussed in this thread? Second, any "programmer" working 10 hours a week and charging enough to live comfortably on that isn't a programmer, they are a consultant.

It has this to do with this thread: programmers who say they don't need to unionize because "their needs are being met" in return for "40 hours a week" don't understand the basic economics of their craft of what being compensated fairly means, and that's something a union could help them with. I've heard more than one case of a big company saying "thanks for that optimization that will save us >$15M/yr for at least a decade, here's a ~$10k bonus!".

The few engineers who care to engage in the negotiations which yield their true market value end up making several times that of the average. Yes, some of them are exceptional engineers, but some are not, and the only real distinction is being able to find and negotiate optimal market rates for their work.

I am a consultant that writes software, does that mean I am not a programmer.

If wasn't supporting a whole raft of people who aren't my kids I could get by on 10 hours a week. Most of these people will be self sufficient in the fall. Then we will see I can get fewer hours.

Charge hourly, produce good work(actually work those hours you charge) and spend enough time learning to stay proficient in your niche of the craft. This recipe won't make you a millionaire quickly, and it won't get you a house in the bay area, but it has given me great financial freedom in the Midwest.

I work 35-40 hours per week and am quite competent and senior engineer in London. You need to find a company which isn't trying to make employees work unpaid overtime. Lots of companies out there are fine with 40 hours per week and pay market rate salaries for senior people.

If I can work 10 hours to have my needs met, I'd rather work 40 hours so I can travel 4 times more and have 4 times more cool stuff.

Travel can be extremely cheap nowadays, e.g. budget airlines on weekdays, last minute deals from the big tour operators. Working one 10 hour day a week will allow for way more travel than 4x the money on a 4 or 5 days work week.

Last year I had a consulting gig in a Europe based company, with offices next to a big airport. As summer was slow anyway I'd work 30h weeks (invoicing four 7.5 hour work days) Tuesday - Thursday, and spend the other 4 days at a beach in Ibiza, Bulgaria or Cape Verde (with occasional remote login to take care of emergencies).

Ah, sounds like no family, no kids and no house then?

I do have two houses. They are in cheap places and the total mortgage payments are what I make in 3 - 4 days.

That's true..but IMO, if you want to reach that level of expertise, you have to spend a whole lot of time every day/week learning new stuff/technologies. At least that's the case for me as a software developer.

Maybe because you define a competent programmer as someone who works more that 40h week?

And their wants?

When I was hired I became the best paid person I knew. I think it would be pretty hard to unionize, but damn if I ain't pissed that that wage fixing scandal wasn't a bigger deal. I work at one of the guilty companies, and I would be happier if I felt like most workers even knew it happened. (even though this was not wage fixing for the average engineer, but for certain high profile roles.)

That's something a worker's organization would help with, even if I don't feel like I need them in wage negotiation.

It would be worthwhile to simply have an organization so that when shitty things happen, you don't have to try and form one while simultaneously dealing with shitty things. A union is like insurance in that way. You get it when you're healthy so that it'll be there for you when you're not.

To this day, I'm still puzzled by the fact that the wage fixing incident didn't blow up in the press. Amazing..

"Some massively rich companies colluded to keep their 5%-er employees from making even more..."

Not that I disagree that it was a huge deal, it's hard to gather greater sympathy/empathy from people that tend to make less than half of those aggrieved.

Exactly. If you're making $35k a year, all that story meant to you was "a bunch of billionaires colluded so someone making 5x what I make couldn't make 5.5x what I make."

It gets worse when you think about how often those "screwed" people that make 5x the median income of an area, make software that replaces 10,000 jobs. This software often comes in an app store and is given away for free with an ad at the bottom.

no it depressed the entire industry's wages

I agree... however, the reason it wasn't reported in the news, is because it wouldn't get a good response for the news agency, and likely piss more people off about the victims of that oppression. I'm not saying they weren't in the wrong, only pointing out why it wasn't more reported in mainstream news.

The 40 hour work week is arbitrary. It was made for railroad workers who had high workplace accident rates and worked 6-7 days a week. Many died because pre-implementation they worked at night w/o sufficient electric lighting as it was not widespread yet. After the war; WWI iirc, the framework was applied to other industries.

So if you don't want to work 40 hours, don't. I have much less sympathy for a software engineer who has better leverage than a kid who works at McDonalds and couldn't earn a living wage working 60 hours.

The fact that you could strike and not really sacrifice much; and if it failed find another job, puts you in a great position. Unions are good for protecting those that can't afford to protect themselves and are at a disatvantage. SE is not IMO a vocation that needs to organize.

"SE is not IMO a vocation that needs to organize."

The games industry disproves your theory.

I think game dev is the way it is because so many romanticize game development. A ton of grads fresh out of college want to get in and are competing for a the limited (but large) amount of work it takes to make a game. The big a-hole studios realize this and charge sub-prime wages because after they burn a dev out there will be another to replace them still starry-eyed from a childhood playing games.

I have read several stories of people leaving game deve for a nice boring job writing insurance software for more money and fewer hours. Many could be doing it the other way around, write software for a lame, but lucrative, insurance company, then make a small lifestyle business writing indie games with a few friends.

> The big a-hole studios realize this and charge sub-prime wages

First of all, "sub-prime wages" is not a thing I've ever heard of. Absolutely nothing on Google so I'm assuming you mean below market wages, which game industry wages are by definition not.

Secondly, and perhaps most importantly, paying people what they are willing to earn does not make game studios assholes. Everyone developing software for game studios knows they could make more writing software for a bank or some YC CRUD app.

> I have read several stories of people leaving game deve for a nice boring job writing insurance software for more money and fewer hours.

With the right skills, you can leave any industry and go to any other industry and make more money. Not sure what your point is here.

Your argument boils down to, "If they agree to it, there's absolutely nothing wrong," which is an argument that I've never accepted before. A person in a position of power, which the studios are, taking advantage of young people to pay them below market wages (which these are, despite whatever you try to argue) and work them insane hours, is wrong, full stop. There is absolutely zero reason why game wages should be below regular development wages.

Also, I think it is hard to get product market fit. You pretty much have to release a whole game before you know if it's successful. Unless you are established it is much harder to bootstrap. You can release a level and optimize but games are super hard.

I agree there is the romantic factor in play as well. You have a lot of supply of devs and a random walk of success stories.

Making a game, is hard to fit the market???

Most people who are super excited to make games are gamers themselves, and it seems to me that most gamers are pretty open minded. In my own research it seems to me that most indie titles that "don't suck" turn at least a modest profit. Don't suck needs to be defined objectively, but not being riddled with bugs (unless that's the point [Goat simulator, Desert Bus]), having a consistent even if primitive art style and being fun to at least some gamers is a reasonable definition.

The breakaway successes like Minecraft and Super Meat Boy should not be examples. Better example are Rovio's 50 games before Angry Birds. They made enough money to live on and make the next title while having a decent but not affluent lifestyle.

Well I don't work 40 hours a week, however sadly that's how long I'm expected to be in the office.

Why would I strike for that? I'm salaried and typically work about 30-35 hours a week. I sit right next to my boss and he has no complaints about my hours or my work so I would be crazy to ask to work more hours. I'm actually shocked at how much they pay me for such enjoyable work.

no thanks. look at what collective/forced/politicized bickering over hours has done to the job market everywhere its been tried. look at the corruption. i enjoy my freedom to negotiate my terms as I, as an individual, and my employer see fit.

I lived and worked in Iceland for five years, and they have a virtually 100% unionization rate. It's handled at the industry level rather than individual companies, but when you start a job, you are pretty much automatically enrolled in the union relevant for your work. A little money comes out of your paycheck, and the union is there in case you have problems.

The unions also provide other benefits. For example, most of them own summer houses that any member can reserve to go spend a weekend away. You rarely hear the average Icelander on either side of the worker/manager divide complain about them at all. Everyone more or less views them as beneficial.

Once or twice a year they make headlines when one group of workers or another feels aggrieved and it escalates to a brief strike in some small sector of the economy, but on the whole, I don't think many Icelanders would trade their system of employment for ours.

Like so many other areas, I think the problem is that we in the US are just so very much worse at running our society and country than most other comparable countries. Look at health care. No one liked the ACA; no will will like the AHCA or whatever the Republicans pass. The problem isn't that it's impossible to do a decent job at a health care system. The problem is that we specifically suck. Put us in charge of anything, and we'll turn it into something awful that doesn't work, but provides some brief period of outsized shareholder value.

I'm always skeptical whenever someone parades a Scandinavian country as an example of anything. The nature of their economies (Norway's massive oil wealth, for example) and the size of their populations means that lessons from these countries are rarely applicable to the US, China, India or other large countries.

The population of the US is 100x more than Iceland. There are a lot of well run small cities in the US. Iceland's policies would never scale up.

"German autobahn system would never work in US, it has 2x population and 25x area". - Someone in 1955, shortly before Federal Aid Highway Act of 1956

> The population of the US is 100x more than Iceland.

Actually, it's 1000x.

Oops. Thanks for the correction.

Why not?

"It wouldn't scale up" is common conservative response to progressive or liberal comparisons that involve suggestions of doing it (anything) some other way.

So while the EU plugs away making incremental improvements each year we keep jumping around in fits and spurts forward and backward. There is still a strong belief of American Exceptionalism even in fields where we are clearly inferior. Look at Healthcare Europe figured something out that we didn't and their is cheaper and better.

Well, there could be legitimate reason that it couldn't scale up, but... "necessity is the mother of invention" and I don't feel it should be left at that. (Particularly on HN, where people seem to take inordinate pride in their ability to find ways of scaling things up.)

Right. If someone is going to make that argument, they should be expected to at least explain why something won't scale up.

Iceland is demographically homogenous (over 90% Icelandic), and 64% of their population lives in one city. It is fairly easy for that kind of grouping of people to reach agreement on things because they have a lot of common interests, and a shared history and culture.

As you "scale up" in diversity, population, and geographic distribution the set of things people can agree on falls off dramatically.

I love how people like to explain things to me as though a wikipedia article presents something over actual knowledge and experience.

Iceland has a very divisive political system at the moment. The ruling government has been a coalition of the Progressive and Independence parties, roughly the european versions of the social conservative and pro-business factions of the Republican party respectively. Though it should be said that no one in Iceland really touches quite how regressive American social conservatives are. And, of course, being (sort-of) Scandinavian, there's a massively strong Social Democrat/Pirate/Left-green contingent in the Reykjavik area that can't stand the agenda of the main ruling parties.

Iceland doesn't function because they manage to get people to agree more than Americans do. There are something like 13 political parties in an average election, and they stand in bitter opposition to one another across a huge variety of issues. Iceland functions because they make their government function anyway. Nothing about being small makes it easier for two opposing parties to somehow figure out a way to get the damned bills paid. You could replace the entire American republic with Donald Trump and Barack Obama, and we'd get no more done than we do today, because the government isn't trying to solve problems. They're trying to preserve whatever problem is most plausibly the fault of the other party.

The US political system is inherently divisive, its no surprise we struggle with social cohesion required for a mature stable capitalist democracy.

We need new political platforms focused on consensus-based policies. Not distinguishing our groups from "the other"

Comparing the US to Iceland is an extremely unfair comparison.

You are mixing up blue collar and white collar unions.

Go look at the film industry, and the Writers / Directors / Screen Actors Guilds. The WGA doesn't stop screenwriters from negotiating their own terms. Do you think someone like JJ Abrams is getting paid the WGA set fees? That Tom Cruise works SAG and Equity rates? Of course not.

The point of the guilds in these industries is to set minimum standards for pay and benefits. It is designed to stop studios from exploiting people desperate to work in the industry. I majored in film and many of my classmates have gone on to work in Hollywood - I don't know anyone of them who would say their unions aren't a good thing.

>It is designed to stop studios from exploiting people desperate to work in the industry.

Would you say that it works?

My understanding is that these unions make it more difficult for new people "desperate to work in the industry" to actually break into the industry.

What do you think "protecting them from exploitation" means?

Sure you do...now. You might find yourself in very different circumstances in the future.

You are never going to be able to negotiate for yourself on an equal footing with a corporation, but unions can achieve a close approximation.

Ya, that EA spouse thing totally didn't happen: http://ea-spouse.livejournal.com/274.html

I don't think any union has come out after that?

The plural of anecdote is not data.

When did witness testimony become inadmissible evidence?

Yes it is.

This is US-specific, in some European countries at least you're automatically part of some union by law if you're a software developer. They don't tend to do collective bargaining, but they're there.

There are plenty of unions that represent it/dev workers I.A.T.S.E and the CWA in the USA spring to mind Prospect in the Uk and IG Medien in Germany

Intelligent people capable of negotiating their pay in a market such as that for software development would only be encumbered by unions. Are there warts? Sure there are. Nothing is perfect.

Maybe have a look at the list here: https://www.tuc.org.uk/britains-unions

* Association of Educational Psychologists

* British Air Line Pilots’ Association

* FDA ("The union for senior public sector managers and professionals")

* Hospital Consultants and Specialists Association

* Prospect, the professionals' union

There are a lot more listed here: https://www.gov.uk/government/publications/public-list-of-ac...

And Norman Tebbit was the president of BALPA and for non UK the FDA is th union for V senior Civil Servants including MI6

That's an incredibly insulting and dismissive framing of the issue.

Unions are important in many industries, including software development. You and your employer may have a good method of negotiating your pay, but that doesn't make it universal

Belittling the presumed intelligence is completely unnecessary

But software devs don't have a professional structure either, as doctors, lawyers, and engineers do, and arguably the industry is the worse for it.

Are there warts? Sure there are. Nothing is perfect.

Isn't that equally true for collective undertakings?

Oh, come on. It has not been that long since we found out that major tech companies were colluding to suppress SWE salaries. Have you already forgotten?

>I think it shows that you can be a successful capitalist without trying to suck every ounce of productivity and profit out of your lowest-paid employees.

Another example of this is Wegmans -





“Our employees are our number one asset, period,” Kevin Stickles, the company’s vice president for human resources, told Reuters in 2012. “The first question you ask is: ‘Is this the best thing for the employee?’ That’s a totally different model.”

"Alec Baldwin spoke on David Letterman about his mother's refusal to leave upstate New York because there are no Wegmans stores in Los Angeles."

Ha, I think that's one of the most ringing endorsements of a business I've ever read.

Having moved from an area with Wegmans to one without, I can sympathize. They're in Massachusetts, New Jersey, and New York, but Connecticut is a sad dead spot in the middle.

Wegmans is also privately owned so there aren't "activist" shareholders that want hockey-stick growth.

Same with Trader Joe's, thankfully

And Costco.

Which also has a reputation of excellent treatment of employees

Maybe, but the fact that they were just acquired by a company notorious for abusing its low-level employees shows the limitations of this model (as did the pressure they began to face from investors to tighten up on that front when they started to become less profitable).

Treating them above market or not, Amazon acquired the company for billions and not because Whole Foods was doing badly.

A lot of time when companies like that get acquired, someone is hoping to profit on the difference between the purchase price, and the value of the company when the management culture switches to wringing every last bit of productivity out of employees. Amazon might have a more strategic goal, but the above strategy is a common one.

Well Amazon is not sitting on hordes of cash, just looking to diversify. This is a strategic move for them. I'd say the odds are greater than 50% that WF culture, and in turn the store experience, gets worse. I mean, Amazon had the choice to not turn their website into a flea market, and we know how that went.

Not sure, but hearing about how Amazon is running into trouble with their grocery stores, they might want to learn something from Whole Foods (similar to Zappos).

There was also an article that talked about the brilliance of Amazon biz organization. Business units are set up like API interfaces, ones that serve both internal needs as well as external customers. The author's claim is that it helps trim the fat, with what was normally internal services being exposed to market forces. It makes me also wonder about WF's fate from that perspective.

WF most likely will fail under Amazon (if WF must adapt to Amazon's business methods), opening the market for local competitors and similar national chains to absorb that market share. Great opportunity for Aldi on the low end and Trader Joe's on the high end.

Groceries are not APIs.

I don't really see TJ as a WF competitor beyond the earthy crunchy vibe. TJ is mostly pretty weak in the produce, meat, cheese, and fish sections which are exactly the areas where WF is often worth the premium. I suppose they compete in the frozenprepared food that pretends to be Artisanal.

TJ is a good deal for some things but it only somewhat overlaps.

Can confirm, lived in place where TJ's and WF were almost in sight of one another and shopped at both, often in the same outing.

I don't see Amazon doing much as far as cultural changes. Twitch was largely left untouched and continues to operate as before. This was a strategic purchase so Amazon. They want you to go to Amazon for everything and a popular nation-wide grocery chain is exactly what they needed.

What you will see is a relationship between Amazon Prime and WF. But, as with the case with Twitch, it will be Amazon that deals with that and WF will likely continue to do its thing while Amazon generates MORE customer loyalty and a new customer base.

I don't know. WF does have a very loyal base of users. Unless Amazon fucks with them majorly, I don't see it changing very much. In fact, with less pressure from activist investors to cut back on expenses, they might actually get more resources to experiment with new concepts.

If money weren't a matter, I would love to shop at whole foods: shopping for groceries seems more of an experience there than at other places. Maybe using Amazon's superior operations management would let them lower prices even further attracting more regular customers.

Depends on the place. In Sedona, when Whole Foods bought the local alt grocer, people got upset at WF's corruption of the grocer's values.

When I airbnb'd in someone's Portland home once, The host worked for another local alr grocer chain, proudly telling me it is like WF but better.

Just a tangent: the downtown Seattle WF has a fantastic eatery ... and in the months before I moved, it turned into a major Amazon employer hangout, after the Amazon HQ moved there. Now I marvel at the irony it is effectively an externalized company cafeteria.

I wasn't talking about making groceries into APIs. It's that, because of the way Amazon is structured, changing out things like logistics is easier:


Flip side is that, according to this: http://www.bizjournals.com/seattle/news/2017/03/27/amazon-go...

There are a lot of troubles with the logistics around distributing produce. The models Amazon has for managing non-perishable goods is not working well for things like bananas. It would be stupid of Amazon not to try to learn from logistics experts from Whole Foods, and Amazon has a good track record for not being stupid.

Side note: just yesterday, my wife and I went to our local Fry's for our normal shopping. They are testing hand-held devices to scan items while you shop and then just settle at the self-checkout line; this was fairly new. We gave it a try just to see what the experience is like (and likely, by the time my step-daughter comes to age, something like this will be normal). I remarked to my wife that Fry's isn't sitting still, waiting for Amazon to take over grocery shopping with Amazon Go, either.

> Aldi on the low end and Trader Joe's on the high end

Trader Joe's has limited selection and is mostly on the cheap side, often even cheaper than Ralph's in SoCal. Its the place I go for cheap produce that just happens to be organic/natural/etc... (though I don't really care about the latter).

If WF were to fail under Amazon's tutelage, maybe we shouldn't be looking at nationwide competitors but at local stores for replacement?

Here in the Bay Area I'm really happy with Draeger's. Haven't really been back to WF much since I started going there. Unlike Trader Joe's it does have a reasonably complete selection of meats (and for specialty cuts there are local butchers).

"Strategic goal" like grocery delivery? This sounds like a move to strengthen their food delivery programs

Exactly my thought.

We had WF delivery for a couple of years. It was great for us. But, you could tell they were trying (unsuccessfully) to monetize it. When they curtailed it they offered a pickup service as replacement: Instacart is the app for placing orders. On the whole, the pickup service works pretty well except you don't get sale prices.

I can see delivery coming back now that Amazon is in the picture. I can also see a bigger push to sell prepared foods for delivery. Prepared foods are the real money makers.

Yeah, now they can offer "healthy"/organic/fresh etc foods for delivery with Whole Food's brand (more trusted than Amazon Fresh). Prepared foods - absolutely. Packaged meals, granolas, sandwiches. Good point.

Whole Foods stock has been down for years. Their year-to-year same store sales fell last year. The entire grocery industry is in a slump:



Amazon buying WF will likely have two results:

1) As long as Mackey can run the company WF employees will stay. Once he leaves (likely soon), they will leave. This is an opportunity for some other investor with Mackey's same principles to buy up WF's human capital. For example, Starbucks will benefit b/c former WF employees make good baristas.

2) Amazon will be left with the infrastructure of WF, primarily the real estate, warehouses, storefronts and whatever slice of humanity Amazon hires to replace former WF employees. So maybe Amazon wants WF primarily for the locations, the real estate and the warehousing capacity. They're getting a good price by buying while WF is at a low.

Amazon is simply too much - time for the monopoly-busters to break them apart.

Amazon is simply too much - time for the monopoly-busters to break them apart.

What exactly does Amazon have a monopoly on?

Selling books? Nope, Barnes & Noble and Walmart and others compete there.

Cloud computing? Nope, check Google, Microsoft, IBM, Racksapce, Linode, etc.

Selling other random stuff on the net? No, Target, Walmart and a bazillion specialty sites also do that.

Groceries? Obviously not.

The idea behind anti-trust / monopoly law is generally to prevent a company from leveraging a monopoly in one area to gain excessive control in another area. I don't see how anyone can argue that Amazon are doing anything like that.

Being big and successful is not, in and of itself, wrong.

It says right in this article (and in others that have been published recently) that they were under pressure from investors.

Good old investors, so short sighted, they only care about the next 3 months. Whole Foods probably would have been better off as private company, especially with the culture they were trying to create.

They had their chance, the culture did not help keep the company above water.

Noted by a friend who used to work there:

- They treat each store (and each department within each store) like its own separate business, which is great for teaching individual managers about waste, efficiency, profit/loss. However they can't bother to get together on a corporate level and combine purchasing power on most things. Every store has to work on making a deal on their own merchandise, separately.

- In a show of solidarity, all employees, whether floor workers or corporate IT, must work holidays and instead have floating holidays for time off. Then predictably there is a seniority effect where the long-term workers get to have their holidays and the recent hires have to come in on a completely useless day and stay till 3 or 4 when the management "lets" them leave.

Also I recently shopped at their 365 store and it's a great store with better prices, but their website sucks and my name comes up as "firstname lastname" on their computers. If Amazon can knock some sense into their IT, that would be a huge win.

> Good old investors, so short sighted, they only care about the next 3 months.

Yeah, darn those investors. How dare people with pensions, 401k's, IRAs, and other investments expect some kind of return on their investment? It's disgraceful. /s

EDIT: The sentiment against investors is rather ironic considering the amount of equity collectively held by HN readers.

The idea that I can't criticize pathological behaviors by investors because I myself invest in things makes about as much sense as saying I can't criticize bad US policies because I live in the US.

You are the investor causing the pathological behavior. A very large part of wall street is investors like you that just have a little bit in their retirement accounts.

Do you vote the proxy for all the funds in your 401k? Do you understand how your vote affects the above - it all does.

there's a way to be an ethical investor - pick a 401(k) fund that invests in ethical businesses (according to whatever ethical standard you hold).

This might not be an option for everyone, of course.

Wrong. I am not telling any company to treat their employees like crap to squeeze an extra penny of profit out of them.

But you are because you own the fund that in turns owns the company.

It might not be your intent, and you might not have enough of a vote to stop it, but you are still doing it. (sort of like Americans opposed to the current foreign policy are still at fault for it)

How am I at fault for a foreign policy if I voted for its antithesis (or, perhaps more likely, nobody with that position stood for election)?

No. I reject your idea in its entirety.

Love it or leave it! /s

'Every nation, in every region, now has a decision to make. Either you are with us, or you are with the terrorists.' Bush.

I don't think you can really equate "activist investors" with workaday people with IRAs.

Take a look at how much of a company's stock is owned by institutional investors. A lot of that money comes from people's pensions, 401Ks, IRAs, etc.

I'm not disputing that; what I am disputing is that such investors are basically the same as Carl Icahn.

short-term boosterism is the cause of more than a few problems in our economic system

There is always a need to balance both the short term and the long term. I rather doubt anyone who has retired and is drawing on their retirement investments will be thinking long term since, to be morbid, they simply aren't going to be around in the long term.

Somebody who is currently living off of their investments should probably have moved most of them out of volatile investments like stock anyway.

who the fuck has a 401K and is interested in short term returns?

You know at some point the 401k is supposed to be paying your bills, yes? That's its raison d'être. When you have investments paying your bills, you might understandably be focused on those investments yielding some immediate returns. Maybe to pay for that leaky roof, or broken down AC...

Why in the world would you have more than a token amount of assets in stock if you are nearing or in the middle of retirement?

Any short term returns from the market should be remarkably small per individual managed by a firm. It's the long term growth that you're banking on when you prepare for retirement years in advance.

The fund managers for the funds in that 401k.

I think your comment is a non-sequitur. I am highly invested in my 401K and IRA but I would much rather have returns over the next 10 years than the next 3 months.

If your retirement is 3 months away, then sure you should be thinking short term, which actually means you should be moving away from stocks entirely. Investors that are really that short term should be in bonds or cash.

Your comment rests on the implicit premise that investors were getting no return worth talking about. There's a big space between not getting and adequate return and squeezing out every last bit of profit.

How many of those billions will the average employee get to see?

Is there any reason they would get a different amount per share than other shareholders? I'd assume it would only depend on how much stock they have obtained either by purchasing it from the market, using the stock purchase plan (where they can buy it for 85% of market price if they agreed to keep it for 2 years), or the stock-grants that were given to employees.

Well, for one, the employees are a huge part of why those shareholders get any returns in the first place.

And the ones who bought stock (including those that did so at the 85% discount) will get the value of their stock. However, shareholders aren't guaranteed any returns. If they bought their stock in 2013 they lost money. Employees who bought stock with the 85% discount won't be quite as bad off as non-employee shareholders.

Imagine suggesting that any employee who was hired when the stock price was higher than the selling price now had to pay money to those who were hired when the stock price was lower. Fortunately, employees are not held liable for the valuation of the company at which they work. If they WANT to participate in that risk and reward they can buy stock--sometimes at a discount like Whole Foods offered.

I reject that notion entirely. The employees are the reason why the store was able to do so well. They should get the bulk of the reward for that.

I flat out reject this idea that people should get the bulk of reward simply for already having money.

You keep referring to the 'moneyed' as an alien entity when in reality it is a lot of index funds, pension funds, 401ks and what not.

Are you saying there should be less/no return for investing your money? If so, how do you suppose we incentivize investments?

The top 5% own >70% of all stock, so no it mostly isn't grandma's 401k or grandpa's pension. Half of all Americans don't own a single share of anything in any form.

You have to admit, whether or not this was ever anyone's intent, from a social control perspective, tying your retirement to the health of the market is a real masterstroke.

I didn't say there should be no return. Suggesting that is quite dishonest on your part.

I merely stated that the bulk of reward should go to those who actually DO something, not those who's only contribution is already having money. Of course they should get a return on that money. It just shouldn't be the bulk of the reward.

Boy aren't you looking to get offended :). I said less OR no return, since it wasn't explicit in your comments. Picking only parts that suit you is ginormously dishonest if my logical OR seems 'quite dishonest' to you :)

But investors are actually doing something as well - they are putting their hard earned money towards a venture. And as it stands today, we have more need for capital than 'actual work'. So it gets rewarded more. In simplistic terms, If you want an investor to put his money into a business you are starting instead of buying up rare resources or hoarding his cash, you give up equity. And hence their reward are relative to the money they put in.

I was just trying to see if you have any alternative plans to encourage such investment. This is back to basics economics as I know, but I don't know much there. Hence my query.


You're not welcome to post vacuous inflammation like this on Hacker News.


OK, so the vast majority of people are "either stupid or lazy or both." What a cheery worldview. How would we have anything resembling today's businesses if everyone over the age of 30 were running a business?

No. This take is completely wrong, and is quite tone deaf.

And the shareholders are [usually/pretty much] the entire reason there is a company there for them to work at and potentially hold some shares in. There are two sides to that.

I disagree with that statement.

And the employee's get a paycheck in return...

-$1,000's, most likely. Unless they have good contracts (which they probably don't).

> Maybe, but the fact that they were just acquired by a company notorious for abusing its low-level employees shows the limitations of this model (as did the pressure they began to face from investors to tighten up on that front when they started to become less profitable).

...or monomania of "the [stock] market," and the myopia of those who look to it to determine what "works."

Yeah, but isn't part and parcel of the "conscious capitalist" ethos that we don't have to mess with any of that?

Well, Amazon doesn't have any low level employees. They all work for Integrity Staffing.

Maybe. But how have some of Amazon's other acquisitions gone? I believe Audible and Zappos were largely left alone after they were bought, but I could be wrong.

While I fully agree that it's great to see employees treated well, Whole Foods is not an example that you can be a successful capitalist this way. They worked well for a while but the reason they got bought now is because they struggled over the past years. Probably unrelated to their treatment of employees (US groceries is very competitive at the moment) but AMZN didn't buy a hugely successful company.

It's a $13 billion sale. I struggle to see the scenario under which that is considered a failure. Most start-ups that get $120k from YC are considered a success here. Someone selling their struggling CRUD app to Amazon for $13 million would probably be considered a success here.

But the $13 billion sale of a public company is a bunch of hemming and hawing about what the stock was worth a few years ago.

I'm not saying it couldn't have been more successful. I'm not saying Amazon won't completely destroy the culture (they may, they may just let it continue as is and use it as Amazon Fresh logistics hubs as some have speculated).

But I don't see how this isn't a great example of how you can treat your employees well - better than almost anyone else at the same level - and make a lot of money while doing it.

> I struggle to see the scenario under which that is considered a failure.

Wasn't Whole Foods valued at over $20 billion a few years ago? If you bought Whole Foods stock at that point (either as an outside investor or an employee) it might feel like Amazon is buying it for $13 billion because Whole Foods has been having trouble staying competitive in the market.

Of course, if you actually started the company $13 billion may be a very big success if your goal was to sell.

The day I sell a company for $13Bn I will declare myself successful. Not everything is going to be a a half a trillion dollar company.

Not if you bought it for $20bn. Wholefoods is publicly owned and the price that Amazon pays is below their price a few years back. It's not about size, $13bn is a lot of money. But Wholefoods needed a strategy or buyer, otherwise they would've faced serious problems in a few years.

How much have they paid in dividends since they cost $20bn?

This is a great question. Are there any open and fee apis where one can look up a publicly traded stock and get out dividends paid out over a time period? Surely that's at least as interesting as the rise and fall of the stock price.

If I had $20bn to buy it in the first place, or be in the position where I could even raise that kind of capital, I would already be successful (in my mind at least).

OK, but WF stock is held mostly by ordinary people (or by pension funds acting on behalf of ordinary people) and the argument being made above is that there are signs that the reason WF ended up being owned by a company without WF's reputation for good treatment of employees is that selling the company was the only way for WF's management to meet their fiduciary responsibility to those ordinary people who hold WF stock.

Whole Foods doesn't have one owner. It's a publicly traded company.

I think what they might be talking about is that Whole Foods has had a rocky few quarters and might be forced to sell, where they wouldn't have sold in a different circumstance.

I agree. I just heard this [1] podcast about the Oneida company. It was one of the first companies to show that paying and treating the lowest-paid employees very well and being very profitable are not mutually exclusive.

[1] http://www.npr.org/sections/money/2017/06/09/532303452/episo...

Of course it's not--you just have to have leaders who don't want 100X what the average employee makes! It's about greed, it's always been about greed.

And it's so much worse than that, really. A lot of public companies are being strip-mined of their true wealth by the insiders. Pump the stock, gut the company, screw the investors.

Maybe sucking every ounce of productivity is by treating your employees well and paying them well?

I think many over estimate how much better off people are with unions in grocery level employment and similar. while unions can be beneficial in some areas of employment it is not a miracle worker or guarantee of better outcome.

well, he was pressured by his board to sell, so, not the most successful.

I think Zappos is a probably a pretty good proxy. They too had a very different culture to Amazon at the time of acquisition, but I believe it has largely remained intact many years post-acquisition.

Amazon as a company has many flaws in its culture (if we are to believe the reports), but they seem to do acquisitions pretty well and know when to leave things alone and let them do their thing.

There's also Woot.com - a company who's culture was a strange counterpoint.

Amazon thought they understood it, messed it all around and now it's a sad parody of the former site.


That particular bit about Bezos and the octopus sells it - You'll be fine if Amazon "gets" your company and it's culture. If not, well...

It's pretty well known internally to Amazon that the woot acquisition was handled terribly and that the food was strangled. It's held up as a what not to do now. Source I know some of the og woot folks and I work for a recently acquired subsidiary in the "strangle don't strangle" department. We're very cognizant of keeping what's good about our subsidiary and using what's good about super mega co and they let us. We're very much on the don't strangle side. It'll be interesting to see how this aquisition "GOes"

It looks like the original Woot folks want to try again:


I was going to mention Meh. Their stuff is hilarious. And yep, it's the original Woot staff, long after they sold their baby to Amazon.

I remember Woot's founder, Matt Ruttledge, mentioning how he didn't get along with Bezos at all.

I think this is a different beast. I personally loved shopping at Whole Foods because the food is high quality and their employees are treated well. These tenets are totally incompatible with Amazon's culture. Sure, now they say they will run it independently, but if Amazon were to struggle with Whole Foods, the first thing they do will be to lower labor costs and food costs.

Unions to protect workers are now more important than ever in this new age of monopolies.

Or, Amazon + Whole Foods can afford to run less profitably than Whole Foods alone... in WF's core in-store grocery business.

Because Amazon can better monetize WF: backing with Amazon's logistics chain, expanding grocery delivery, cross-marketing with customer's existing Amazon purchases, and using WF's real estate for warehousing stock closer to affluent customers for one hour deliveries.

I absolutely agree they'll be tempted to squeeze costs, but I think there's a viable financial option to run WF as-is and still accrue benefits to the greater-Amazon.

Amazon is a tech and logistics company. I doubt very much that their strategy is "buy random company, lower pay of employees, profit". This was a very strategic move for them and I am sure they intend to use their tech and distribution platform to increase the profit, rather than slice and dice the store experience and quality at the local level. This is what differentiated WF from many other grocery stores that I'm sure Amazon could have bid on, why would they want to ruin the one thing it had going for it?

" Online delivery of groceries so far has been tough for any company to pull off because of customers' concerns about the quality of meat and produce, Wedbush Securities analyst Michael Pachter said. But if customers know that what they are getting is the same as what they'd get at the local store, they are more likely to try it out.

Pure speculation but I'm guessing their strategy here has a few elements: - they need to get to meaningful scale on the buy side of the grocery business which they weren't able to do on their own - Whole Foods is already a "tech friendly" grocery brand (Instacart, Apple Pay) - Whole Foods has a lot of premium/value add and non-grocery products (prepared food and organic underpants and such) that offer more profit margin than just groceries

It probably also doesn't hurt that Whole Foods is the only grocery store within walking distance of Amazon HQ and about 1000 employees eat lunch there every day.


And what would Whole Foods do if things were turning bad? IMO the exact same thing.

> Amazon were to struggle with Whole Foods, the first thing they do will be to lower labor costs and food costs.

They'd do what any company that doesn't want to end up bankrupt to do. Attack the easy parts first (overly expensive infrastructure, etc) then hit the two major cost centers: labor and food costs.

If it comes down to two options: lower wages/quality of food or a company that no longer exists, the former is probably the better alternative, no?

On the other hand, Kiva Systems which is now Amazon Robotics is apparently now a terrible place to work. :(

As an aside, the creation of both Zappos and WF was told on NPR's How I Built This. Very interesting podcast if you like company culture and how it's designed/maintained.


I think something similar happened with IMDB and Twitch.

The value of Zappos is integrating the procurement and warehousing with the Amazon operation. The front end can remain distinct. The same applies to the WF distribution network. That is the hardest thing to get right in the supermarket business.

Thats what I heard.

Twitch.TV is the same way, after it got acquired. They just leave them alone and let them do their own thing.

Having worked for a retail software company that was purchased by Oracle, I can assure you Grocery retail is the most difficult retail supply chain to execute well. The margins are razor-thin. The products have myriads of stubborn problems: short life checking, long life checking, mix of delivery types (direct, warehouse, corporate and 3rd party), very complex planograms, composite units of measure, challenging shrinkage problems, many more supply chain cas fortuit issues.

Amazon made its name by shipping consumer hard goods. It continues to do well with non-perishable items. But this nut is the Everest of retail. It will be a challenge to get it to fit into their model.

>It continues to do well with non-perishable items.

I've tried a bunch of different grocery delivery services (Seattle area) and Amazon Fresh is far and away the best of them. I stuck with Safeway for four months and literally every single time they delivered an order, there was a problem with the order. Every single week! There was always something missing (not even obscure stuff - once they claimed to be out of bananas, for example) and the packaging was terrible - just getting the bags from my front door to the kitchen often let to something falling out and breaking.

Amazon Fresh does things very, very well. They show up on time, almost never have a stocking issue and the packaging is very well designed - the frozen stuff is packed with dry ice, the cold stuff with an ice pack and the rest are packed into reinforced paper bags that are sealed to prevent stuff falling out en-route. It takes only moment to move everything into my kitchen and I've never had something break en-route.

Customer support is much better too - every time my order was missing an item, I'd have to call Safeway and often I simply couldn't reach someone (especially outside of 9-5).

Grocery stores need to up their game quickly or they will go the way of Sears and K-Mart.

Echoing this about Amazon Fresh. I have ordered 3 times (mainly meat and veggies) and it's been flawless. Their packaging is great, the quality of the food is great. It is a luxury purchase but although the prices are more than at my local store, they are less than what I would pay at WF. Most importantly, the delivery times are very flexible and easy to arrange...with the same great search engine amazon uses for everything else. I tried a few other grocery delivery services over the years and they couldn't promise any delivery window, their packaging was terrible, and you had to be there in person to get the groceries.

As an aside, the amazon fresh packaging is great as trash bags. The ice packages they send along are great to put in your freezer and use later on trips. They recently (at least to me) added a durable cloth-based cooler, which they say you can put on your porch and they will reuse. I may let them have it back or I might use it as a cooler for my normal grocery store trips.

It is slightly more expensive, but the bottom line is that in the middle of the week I am just too worn out to go to the store, so being able to have a mid or end week delivery means that I have stuff at home instead of having to order out.

I guess I qualify as an amazon fanboy ;-)

Relevance to this HN story, I think they can probably leverage this to help their Amazon Fresh business.

Your point about grocery logistics being difficult is a good one. However, Amazon is not new to this.

- Amazon has been shipping tens of thousands of non-perishable grocery SKUs from their main site for about 10 years. They've had to deal with expiration dates, chocolate that can melt, bundling multiples, highly variable shipping cost vs margin, etc. That organic cereal you buy at WFM is available on Amazon too.

- They have relationships with all the large packaged-goods companies.

- They've been operating a small-scale local grocery business (Amazon Fresh) for about 10 years, now in 14 cities.

- A lot of this direct-to-consumer business is complementary to Whole Foods' experience.

Whole Foods is stable as a company and (afaict) has higher operating margin's than Amazon's retail business. So they could largely leave them alone but still gain a more-or-less national perishable foods supply chain that lets them open Amazon Fresh and Amazon Go in many more cities much faster than if they had to do it from scratch.

>But this nut is the Everest of retail. It will be a challenge to get it to fit into their model.

Looking at it the other way: Amazon knows it's bad at this, so it's acquiring the expertise.

> margins are razor-thin

at any other grocery store, yes

The most you could say is WF's margins are "thin" instead of "razor thin". They're not writing US student loans here.

I think they have higher costs too. In the UK their sites are in High Street locations unlike most other grocery stores. They also have a lot more front of house staff and have very high quality standards for their products and displays. That all costs and eats away at the raw cost-of-goods margin.

And it's not just an idiosyncrasy to maintain that stuff either. If they don't maintain the perception of being a premium brand/neighborhood anchor people will stop shopping there.

Whole Foods gets higher margins because their customer base cares more about various intangibles beyond just the value-for-money. Take those intangibles away and suddenly you're competing on value-for-money alone and Walmart will eat your lunch while smaller, independent grocers go after your dinner.

> cares more about various intangibles beyond just the value-for-money

Very much, like many premium businesses part of what they are is to ensure everything will be lovely, easy, and just happen. That is the added value. Take that away and you're competing against ASDA etc. Premium brands need to keep that, it is a very valid market but must be looked after.

There are actually a number of items in WF that they sell at cost or below

It's more than 1 year that Amazon fresh launched in uk, I guess it is even more time it launched in us. And I think is doing pretty well, I have been buying my weekly groceries always in Amazon for a while now.

If Amazon acquisition of Zappos shoes is an indicator, Jeff Bezos let Tony Hsieh (CEO) continue to keep the culture. Hsieh said in past interviews that Bezos if fairly hands off. There was still some business "synergy" in the acquisition because Zappos logistics got integrated into the Amazon warehouse in Kentucky.

Whether Bezos treats Whole Foods the same probably depends on whether he has confidence in existing management. It's also possible he has ambitions to totally remake WF into something else. In that case, it doesn't matter what managers are there because Bezos wanted the Whole Foods market presence and not the management team.

Zappos CS, front office, creative staff (etc.) got to keep their culture. Zappos warehouse workers got shafted.

Blame Hsieh. He is given carte blanche over Zappos as long as he meets his revenue targets. Full stop.

Would it be possible to expound on this comment with a decent source (first party is totally okay!)?

I ask not as a personal attack on your credibility, this comment just seems a bit inconsistent with the Holacracy movement that he championed a couple of years back.

https://pando.com/2012/06/06/zappos-hands-over-warehousing-t... - as you can see, the warehouse isn't included in any of the good stuff, it was just unceremoniously handed over to Amazon to be run as Amazon warehouses are run.

I agree that this is inconcsistent with the Holacracy movement (even if the move preceded the movement officially, clearly these workers were never fully Zappos employees in Tony's eyes, which is sad).

Thanks for sharing, and I agree that it is always sad to see upper management marginalize the contributions of certain groups of employees.

Disclaimer: I work for AWS, but my opinions are my own.

I don't think you have much to worry about if you're a WF employee. Amazon actually treats their employees very well. In my experience here, I've never seen any of the things the NY times article talked about, either on my team or any other team I've interacted with. People have a healthy work/life balance (40-50 hours a week), get paid very well (definitely above average, and probably in the top 25% of industry), and in general they are concerned with long-term employee sustainability, rather than letting employees burn out and quit.

I know that there are some stories about bad experiences in the fulfillment centers, but keep in mind that those positions are temporary seasonal work by unskilled labor. That's a completely different environment than full time employees work in.

I know that there are some stories about bad experiences in the fulfillment centers, but keep in mind that those positions are temporary seasonal work by unskilled labor.

The tone of your writing suggests that you are OK with treating these people badly. If a company treats some set of its workers badly, what stops them from treating other employees the same way? In this case, they may treat SW engineers well because there is a lot of demand for engineers, and they have to be treated well to retain good folks. That is not comparable to the good culture that OP claims WF has.

Have you ever worked a minimum wage food service or warehouse job before? I have, and believe me, it's hell. I spent my high school years working as a cook at KFC. Hot summer days spent making $3.35 an hour standing over pressure cookers full of 400 degree hot oil and lifting 50 pound baskets of deep fried chicken out of them. You get a 15 minute paid break every 4 hours, and a mandatory 30 minute unpaid break for lunch.

I'm not saying its ok to be inhumane or break laws and treat your workers like cattle. I'm just saying that if you've never worked at a minimum wage unskilled job before, you probably don't realize how much it can be hell, just due to the nature of the work. The same thing can be said for lots of labor like farming, construction work, mining, etc.


I'm not going to argue with you. I'm just pointing out that many of us have relatively easy white-collar jobs that pale in comparison to the hard, manual labor that our grandparents did. Expecting a warehouse job to coddle you is ridiculous. You're working in a warehouse - you know you're going to be standing on your feet, walking about 10 miles a day, your entire shift (outside of breaks). If you can't handle that, don't take the job. Nobody is forcing you to.

> Nobody is forcing you to.

The economic/social situation of people force them into these jobs. Just ignoring this and accepting it as reality is ridiculous. This can be said of any of such social behaviours. In some cultures, the violence on women is countered by the logic that they were wearing certain kind of dress and nobody is forcing them to do this etc ..

There are certain values in society that we should try to fight for. They may seem idealistic in current perspective, but nevertheless we should strive for them to make progress inch by inch. Brushing them off under the pretext of "nobody forced them" is not right.

Bullshit. You either take a job, or you don't. Nobody is holding a gun to your head. Nobody forced you to live where you do. Nobody forced you to choose a place to live that doesn't have opportunities. I've moved to half a dozen different states to get a better job, because I realized, like any reasonably decent person, that you can't expect others to improve your own situation. You need to take charge of your own life, and improve it, if you want to.

I get your point, but the fact that one way to improve working conditions is to take matters into your own hands doesn't mean that we should rule out the other course of action: pressuring companies to change.

I remember reading a story about a 19th century company that literally put chains on the doors to prevent workers from leaving the building. When a fire broke out, dozens died. Today we don't allow that type of behavior, and for good reason. The reason that you can move elsewhere to get a better job is because society has worked to ensure the prevalence of said good jobs, and I hope it continues to do so.

> I know that there are some stories about bad experiences in the fulfillment centers, but keep in mind that those positions are temporary seasonal work by unskilled labor. That's a completely different environment than full time employees work in.

But probably more similar to most jobs in a grocery store than a software engineering position.

I mean keeping an ambulance outside the doors to a warehouse because its cheaper than cooling it is a tad inhumane.

> I mean keeping an ambulance outside the doors to a warehouse because its cheaper than cooling it is a tad inhumane.

Just a tad, but the financial analysis told us inhumanity was the right direction to move in. /s

I believe HQ staff was very unhappy about that situation and that (some of?) the warehouses in hotter places have A/C now. (Source: live in Seattle, know a number of Amzn employees.)

I haven't seen any articles about the working conditions at warehouses in years, have you? In the mean time, they've opened dozens more warehouses.

(The latest was the NYT article which was about office jobs and which is a whole discussion in its own right.


It took literally two seconds to find:



> In a lengthy and heavily reported article, The Call said a warehouse employee contacted the Occupational Safety and Health Administration on June 2 to report that the heat index in the warehouse had reached 102 degrees, and that 15 workers had collapsed. The employee also said workers who were sent home because of the heat received disciplinary points.

> Eight days later, the paper said, an emergency room doctor at a local hospital saw enough Amazon employees suffering from heat-related injuries to call OSHA and report “an unsafe environment.”

> So many ambulances responded to medical assistance calls at the warehouse during a heat wave in May, the paper said, that the retailer paid Cetronia Ambulance Corps to have paramedics and ambulances stationed outside the warehouse during several days of excess heat over the summer. About 15 people were taken to hospitals, while 20 or 30 more were treated right there, the ambulance chief told The Call.

I suspect keeping ambulance at standby was more of a hotfix for a bug, than a feature. Yes Amazon is frugal, but I think it is a bit of a stretch to assume there was malicious intent in not cooling their FCs.

In a giant warehouse managed by a company with > 100k employees, things are not changed that quickly...

They're not malicious, so much as indifferent.

Maliciousness probably costs money, and Amazon's looking to spend as little as possible on these warehouse resources.

Regardless of indifference or malicious, its still breathtakingly inhumane.

I did a contract at Amazon here in the Dallas/Ft Worth area, and in my experience between the warehouses (I think that there are now 8 in the DFW area alone) these stories were the exception, not the norm.

I wasn't a contract product picker either, I'm a Paramedic that helped staff the on-site medical clinic, which exists mostly for workers comp paperwork and the occasional emergency. (in 6 months, I responded to 2 actual medical emergencies.)

The warehouses were not overheating even in the Texas sun, we didn't have an ambulance sitting outside, and people weren't passing out. I'm not sure what was up with the one in the story but it definitely sounds like more of an exception than the rule. But that story of that warehouse just keeps coming up.

Keep in mind this is from 2011...A lot has changed at Amazon since then.

>but keep in mind that those positions are temporary seasonal work by unskilled labor. That's a completely different environment than full time employees work in.

Some positions are temporary seasonal labor, but Amazon employs people full time in their fulfillment centers as well, and they work hard trying to convert the former into the latter.

Where I am (near Austin, TX), Amazon is running a campaign to recruit UT students with the promise of "tuition assistance." The way they treat their FC employees has nothing at all to do with their relative skill level, educational background or expected tenure. They've also been pushing 60 hour mandatory overtime for over a month for some shifts and they pay well under the cost of living for the area in which they operate, and I expect that represents the general treatment of the majority of Amazon employees, because there are far more of them at the bottom of the pyramid than the top.

I don't doubt the engineers are doing well, though. They probably get chairs to sit in and everything.

> I know that there are some stories about bad experiences in the fulfillment centers, but keep in mind that those positions are temporary seasonal work by unskilled labor.

This might be one of the more tone deaf things I've read on HN in recent memory.

Please see my other comment. I've worked a $3.35/hr. minimum wage food service job before and it's hell. If you took 1,000 average citizens and threw them into minimum wage food service, factory, or warehouse work, I would completely expect a good percentage of them to burn out and quit within a couple days. Unskilled jobs are just too hard and require too much effort for too little salary to make them acceptable to a lot of people. This doesn't mean they are inhumane; it means we've grown accustomed to easy, white-collar jobs and are fairly divorced from the reality of hard, physical labor these days.

Any job that would cause a good percentage of people to 'burn out and quit within a couple days', would fall into the category of inhumane for me.

Fair enough, but keep in mind that in the 1800s, parents often made their young children work 16 hour days in the sun farming for them. Child labor, under harsh conditions. We've grown accustomed to a much easier life now, but it was not always like this.

Is there a point you are trying to make that's relevant to this discussion? I have read a few of your comments on this thread and I just can't for the life in me figure out what point you're trying to make.

Honestly, forget it. The point I'm trying to make is that nobody owes you a handout or an easy job. The fact that I've worked brutal fast food jobs for $3.35 an hour, yet you don't see KFC, McDonalds, Taco Bell, etc, being trashed here for terrible working conditions, while AMZN is, speaks volumes.

Today has taught me that HN has a pretty fierce anti AMZN bias, and it shows. I have 4K+ karma, and am sharing my honest opinion and experiences working for AMZN for the last year. Next time, I just won't participate. This community has gone downhill pretty seriously in the last few years... No big loss.

Please don't let me comments prevent you from participating in good discourse. I just don't understand why you are so hell bent on defending Amazon at the expense of all the "seasonal unskilled laborers". They are humans like you and me and they are not secondary citizens. It seems to me like we should be trying to make other people's lives better. I will trash whatever place that mistreats its employees. But this is Hacker news and the topic is about whole food and amazon. Why you keep bringing the fact that you worked for $3.50 an hour at McDonald's is beyond me. Damn man, just because you suffered from having to do fast food doesn't mean everyone else should too?

> The fact that I've worked brutal fast food jobs for $3.35 an hour, yet you don't see KFC, McDonalds, Taco Bell, etc, being trashed here for terrible working conditions, while AMZN is, speaks volumes.

If it speaks volumes, those volumes are more about this being a tech-industry biased forum than anything else. We don't really talk about the fast food industry and it's working ccondition nearly as much (though, even so, the whole industry is often used as a shorthand for terrible working conditions even when discussing other things.)

Your idea that the fact that HN talks about Amazon more than the fast food industry is anti-Amazon bias and not tech-industry focus is interesting, but not particularly plausible. (Especially given that plenty of that talk is positive.)

I appreciate your honest opinion and I am only providing my own honest response. This thread is about AMZN, you talked about how some workers are treated at AMZN so that's what we are talking about. I actually happen to love AMZN as a whole and own stock in the company which has done extremely well for me. My company buys almost all of our equipment off AMZN. That doesn't mean I can't criticize them when I disagree with one of their practices.

It's interesting to hear these stories, because when I was looking for a job, naturally I talked to all my friends that had worked at Amazon at one point. Out of maybe 6 people, 4 had some pretty negative things to say. These are all career SDEs/SW/SDETs, but on very different teams and divisions.

I once had a coworker that walked into the building, and said that morale was so low people would start crying when they were paged. Gave back his signing bonus and resigned immediately.

Completely anecdotal stories obviously. Not saying you're wrong, but you may be the outlier?

> Disclaimer: I work for AWS, but my opinions are my own.

> I don't think you have much to worry about if you're a WF employee. Amazon actually treats their employees very well.

Normally when people say Amazon abuses their employees, they aren't talking about AWS.

> Amazon actually treats their employees very well.

Do you mean the software developers who work on Lake Union or the many lower skilled people who work in Amazon's fulfillment centers...like people who would work in a grocery store...

> I know that there are some stories about bad experiences in the fulfillment centers, but keep in mind that those positions are temporary seasonal work by unskilled labor. That's a completely different environment than full time employees work in.

People who work at Wholefoods aren't software developers making top bucks.

I don't think this is completely true. I was with AWS for 3 years as SW engineer and was working around 12 hours until I decided to switch. AWS has pretty messed up softwar services with lot of technical debt. Rather than fixing these, AWS relies on oncall (pager duty) to mitigate production issues. My team use to get 200 pages a week.

I've heard similar stories from several AWS engineers who were looking to leave or recently left. I can believe that pieces of AWS have good culture, because AWS is a large set of services and it's inevitable that it's not 100% consistent across the entire organization. But I also fully believe that parts of AWS are "duct taped together and on fire" because I've heard it from multiple sources.

I've never had anyone in person tell me that Amazon was a good place to work unless they were trying to recruit me.

I've worked here for a year and have never seen that. I'm sure there are a few bad managers, as there would be in any company with 350K+ employees, but Amazon really tries to take a data driven approach to employee retention. If you think they don't know this causes burnout and aren't trying to optimize for long-term employee sustainability, you're underestimating their management talent.

I think working in a grocery store is more similar to working in a distribution centre than at AWS. Highly paid engineers are usually treated well, unskilled/low-skill labour often not (not implying that this is the job OP does, but many in WF will be low-skilled).

> People have a healthy work/life balance (40-50 hours a week)

40-50 hours of work a week isn't healthy.

Why not? The important part is commute. 50hr work week in a job you like with a reasonable commute is no problem for your health. 30hr/week in a job you don't like with 2.5hr in traffic each day is much less healthy.

Unless all 50 hours are compensated, 10 of them at 1.5-2x base pay, the person working them is getting ripped off.

Every one of my friends in engineering (actual engineering, e.g. civil, aerospace, etc.) positions get at least 1.5x for any hour over 40 they work in a week. In fact "unpaid overtime" is something I hadn't heard of for an engineering position prior to working in software. It's almost like workers in this industry are competing to see how much they can let themselves be exploited.

I'm guessing you don't live in the US, or your friends are underpaid, or they work for a firm that chooses, but does not have to, provide overtime. Actual engineering should generally be considered exempt from overtime.

1. If nothing else, engineers are considered a learned professional.

2. They probably make over $100,000 per year.

3. They may hit the executive exemption.


Their firms choose to provide overtime. I live in the US, and so do they. They are underpaid, but so are software engineers (even adjusting for overtime or lack thereof).

In the US, software developers are exempted from the law requiring 1.5x pay for overtime. Not sure it matters if they're salaried instead of hourly to begin with though.

This is in the US and they're all salaried. Their overtime is computed as a function of the equivalent hourly rate, biweekly pay, etc.

That is a set of regulations that vary state by state. I work in mass and I have never received a dime for overtime

It has nothing to do with regulations, actually. These companies they work at aren't normally obliged to pay overtime by any regulation or contractual obligation. The engineers there are "exempt" employees, classified identically to what a software engineer would be.

In some cases these employers' contracts require them to pay overtime to employees that work on the contract project, but generally that isn't the case. They pay overtime because of the historical evolution of the industry and the expectations and dynamics of the employer/employee relationships.

I guess you are speaking about juniors/graduates? Senior engineers in my experience in two different European countries have always contracts with unpaid overtime exactly as management contracts.

No. Three of them have very senior positions (e.g. principal or chief engineer). They've always had paid overtime at every stage of their career.

Interesting, my undergrad is actual engineer, Electrical, worked in VLSI design (GPUs) for 4 years after college, and nobody I ever heard doing EE every got paid overtime.

You have to negotiate your salary based on these assumptions. Or get paid hourly (as a consultant or contractor). I'm not currently hourly, but I am also not getting exploited, either. Most places I have worked didn't give a damn about their employees. They would just use them up and get new ones when people eventually got fed up and quit (or got sick and quit, in a few cases). When you bill hourly, projects are far more honest in terms of not shifting costs onto the staff.

Says what research?

Agreed, although I imagine it's probably the norm unfortunately.

I mean to be fair, most of the jobs at WF stores ARE unskilled labor though.

Our proclivity to treat all “unskilled labor” as if the people doing them are trained monkeys is one of the reasons customer service in large retail stores is so often horrible.

If you treat your people like valuable members of society/your organization they will develop and improve on the actual skills that an unskilled job needs, like anticipating problems, knowing when an how to escalate issues, being warm to customers, being knowledgeable about the business and your products, and hustling when needed.

If your treat your people like disposable chattel then they’ll show up to punch a clock, check the boxes, and get out as soon as possible.

When comparing price to customer service, price wins every time.

We can say all we please that we want great customer service, but we vote with our wallets, and our wallets say "Save $5 per trip to interact with the trained monkeys."

Thus, we have Walmart.

>When comparing price to customer service, price wins every time.

This is very much a cultural problem that stems from treating service workers as subhuman and undeserving of a decent wage.

And the price difference is hardly as high as $5 per trip. Even places with really high minimum wages don't get that bad. It's more like a few extra cents, barely noticeable. Where the savings on payroll at the bottom are going is usually payroll further up the chain.

Some stores have much better customer service than others, like Whole Foods and Costco (just to cover both sides of the pricing models), and they seem to be doing all right.

Not true. I know several people that have good careers at WF and would be offended by the fact that you think they are unskilled.

Seasonal workers in the FCs literally get only 4 hours of training and are then filling orders. That's the pure definition of unskilled, and a far cry from a pastry chef at WF.

That's not what unskilled means in this context. It just means that they are easily replaceable and not specialized. You can have respect for people as individuals while recognizing that the job they do could be done by just about anybody (the definition of unskilled)

A pastry chef is unskilled?

How many employees at WF are pastry chefs and how many are in stocking, orders, cleaning, and manning the register?

I feel like at least half of the average grocery store staff I see are skilled: butchers, fishmongers, cheese and wine managers, and pasty or bakers. Proportion varies with class of grocery: BiLo obviously having fewer than WF.

There's the checkout counter and stock in the back, but I feel like the employed-during-the-day crew definitely has career opportunities.

Thank you for saying this. WF needs a half dozen unskilled workers to stock shelves, and about 6 dozen skilled laborers in the trades you mentioned. Do you think a 21-day dry-aged steak can be made by someone that just showed up during a high school job fair with zero training? Would you eat it?

It's not that pastry chef's are unskilled, but they are very easily replaceable. It's really difficult for culinary school grads to find work because of the influx.

Not true. It's very hard for restaurants to find skilled cooks nowadays because the salaries they are willing to pay are not high enough. When an artisanal pastry chef can open their own business, setup a Stripe account, and make six figure income, you know a restaurant only willing to pay $45K for a skilled chef is going to have a problem...

A pastry chef is to WF what an AWS engineer is to Amazon.

IIRC the definition of unskilled labor is one requiring less than a year of training.

What I mean is you don't necessarily need a college education to work in any of their departments. Not trying to be offensive

Oh well, you know a dozen people working at Whole Foods that have good careers, guess the literal thousands of people working in the stores, filling the shelves, being cashiers, etc., usually being the first ones to be thrown away, overworked and overpressured don't exist then. Only white collar jobs matter after all.

Enjoying your ivory tower I hope?

So the people stocking the shelves and operating the registers are all highly skilled labor?

>I know that there are some stories about bad experiences in the fulfillment centers, but keep in mind that those positions are temporary seasonal work by unskilled labor

But keep in mind poor non-tech people are trash and you can treat them like it!

I surely hope you are correct for the sake of the workers of WF, but...

If you work for AWS, you are either software engineer or linux/network admin. And that means you bring high value to Amazon. So yes, Amazon would treat you well.

But as you go further down the value chain, your treatment will get exponentially worse. And I can't imagine cashiers and stockers being viewed as high value makers by Amazon.

> keep in mind that those positions are temporary seasonal work by unskilled labor

What do you think most Whole Foods employees are?

Yes, but fulfillment center employees are likely much more comparable to whole foods employees than software developers, in terms of education, job responsibilities, ease of replacement, etc. So that's probably who we should be looking at anyway

There's one key difference that the retail employees are interacting with customers whereas the distribution center employees are hidden away in the factory. Not sure how important this difference will be, but it could definitely influence the company's behavior.

okay, so its fine to treat unskilled labor and temp workers poorly?


I'm sure this is true but you sound exactly like Uber employees who come on here and say they've never seen any of the issues.

40-50 hours a week is NOT a healthy work/life balance. Nice try buddy.

50 hours per week really isn't that bad if you're getting paid well for it

I'm a long time WF stock holder and fan of "alternative" grocers. Since it was Wild Oats. There are some big investors that have been unhappy and applying pressure. WF is fundamentally a regional thing that they made multi regional. It doesn't work everywhere with everybody.

I'm just guessing, but I'd think WF would tighten up the philosophy a little, probably focus on whole and natural foods more than some of the other philosophies as that can scale. That would mean maybe leading a little less with local, FT, and only organic in favor of whole and natural food. Perhaps some more brand name stuff on the shelves. It provides a great way to roll out Go with a customer base that is probably receptive to it. THen I'd expect more technology stuff, curb side pickup, maybe even free delivery from amazon to WF stores for pickup, maybe.

You cant change WF too much or it just breaks and people like it for what it is. I think it would be easier to start a generic grocer from scatch than turn WF in to a safe-way.

Wild Oats was bought by WF, but that purchase was later reversed.[1] I used to be a Wild Oats shopper myself.

1. https://en.wikipedia.org/wiki/Wild_Oats_Markets

Yes Whole Foods started in Austin around 1981 as one small Coop named Whole Foods.

Considering Amazon has been developing technology for walk in, and walk out checkout, and owns a robotics company, there might be a lot less of them.

Indeed, I think this is precisely the point.

As a loyal Whole Foods shopper I am EXTREMELY excited by this development. The worst part about grocery shopping anywhere is waiting in line. There are a ton of jobs at Whole Foods that have nothing to do with running the cash register, and as long as Amazon keeps those jobs intact I am all for the automation revolution.

I have never worked as a cashier, but I can't imagine it's a very fun job. Automating out those jobs seems like a win-win, as long as the former cashiers can find a job doing something else.

Edit: For anyone wondering where my perspective is coming from, see this: http://www.businessinsider.com/amazon-go-grocery-store-futur...

>> I have never worked as a cashier, but I can't imagine it's a very fun job. Automating out those jobs seems like a win-win, as long as the former cashiers can find a job doing something else.

Stacking the shelves isn't anymore fun that working the checkout. As someone who has done both I'd say checkout is the preferred role as it's much less physical (stacking shelves gets tiring after 8 hours) and you get chat to customers.

Good point. I'm an introvert so talking to people for 8 hours wouldn't be my favorite thing in the world, but sometimes I forget not everyone is like me.

When I was talking about the other jobs at WF I was thinking about like.. the ice cream scooper, and the smoothie maker, and the customer service rep at the front for when people want to return items. That's not to mention all the the chefs that make the food for the hot bar, or the bread and cookies for the bakery department, or the sushi. All of those jobs could have a social element to them.

Never been to a WF (we don't have many here) so didn't know those other jobs existed. Seems like they do have a lot of work to go around then instead of just stock work/checkout work.

Time flies in the cash registers (unless the store is dead). Stacking shelves and organizing them is so boring that your four hour shift will feel like eight.

Having done both, I prefer stocking. But that comes with a caveat that I've never worked more than a four hour shift. I can imagine that an eight hour shift of stocking would be brutal.

Coming back after mid-shift break for another 4 hours was always pretty hard. With stocking there was always something to do as well (staves off bordedom but also tiring). Checkouts often have peak times so you often get long periods where you're really just chilling with your co-workers.

As far as lines go, one of the things I love about Whole Foods is that they always seem to have enough capacity at the registers so that there's one with no line. Worst case, one person in front of me. And the average cart is small there, so it's quick.

Contrast that to other grocery stores (Shaws and Wegmans, for instance) that seem to calculate exactly how many cashiers they need such that no line is more than 3 people deep, but none of them are idle, ever. And the average cart is full-to-the-brim, so there's always a wait. It can be 9pm at night with 3 customers in the store, but there will still be a wait.

Honestly, I'd be thrilled if they simply added an Amazon Locker at each WF location. I'm in the north Dallas/Ft Worth area, and occasionally buy pricy stuff from Amazon that I'd rather not have sitting on my front porch with all of the package thefts that happen nationwide. A nearby locker would be great. Example: I'm near McKinney. The nearest Amazon Locker is either at a 7-11 in Garland, or way out at a QuikTrip gas station in Greenville. (Yes, Greenville!)

A locker would get me into Whole Foods more often for sure.

Having done both, and having once been an otherwise unemployable 15 year old, I'm saddened by this development. I learned some valuable skills at that job. I'm not sure there are many other entry points to the job market for young people that want to or need to work.

I'm sure the point isn't just to get the technology into Whole Foods, but rather to use Whole Foods to advertise the technology to every other retailer.

It's like how Mark Zuckerberg launched Facebook, except for if he had just bought Harvard.

My roommate works at WF and gets paid minimum wage, gets crappy benefits, is never allowed to work 40 hours to avoid being labeled "full time", and her schedule is generated by a computer with no human input allowed.

The schedule thing sounds like a fair deal, if you allow human input the people with "people skills" will benefit at the expense of those that are socially awkward.

I would recommend anyone wanting to learn more about John Mackey, and how he built Whole Foods, to listen to a recent episode of the How I Built This podcast featuring him: http://one.npr.org/?sharedMediaId=527979061:528000104

The problem with 'conscientious capitalism' is that a competitor will take the idea and run with it, save for the 'conscientious' elements, and push out the original from the market.

> The problem with 'conscientious capitalism' is that a competitor will take the idea and run with it, save for the 'conscientious' elements, and push out the original from the market.

That's not a problem with 'conscientious capitalism' itself, it's a problem with the monomania of the market and the loss of compensatory factors that could hold that monomania in check.

I don't know about this. I think it's been over-done to such a degree that actually good customer service is a rare gem to find at this point, and is a better discriminator than price in most products. The price difference is rarely worth the hassle or tension of dealing with bureaucracy or unpleasant people. Or bad websites.. I really can't stand vendors who can't build an easily navigatable, fast website.

I've stuck with my cell vendor because of the customer service, even when the price / coverage wasn't as good as I perceived others would be. I've also left my cable company for a poorer competitor because of the difference in customer service. I've got thousands of miles on United that I never intend to use now.

The trouble there is under certain circumstances, good will is a commodity. It can be accumulated through a pattern of behavior, and then spent (converted to capital) to turn a short-term profit.

So there's a legit strategy that makes sense to a Wall Street firm, where you specifically go after stuff with good will so you can convert that to capital and then flush what's left. It's not dissimilar to how real estate is a form of storing capital, best used without actual people living in the real estate to mess it up: the wipe-and-flush strategy is about intentionally converting these 'rare gems' into raw capital through using the goodwill up.

As long as that is more profitable than not doing it, good customer service (or 'enlightened' capitalistic activity) is something you can't have, or can only have until it's seized and squeezed. Market forces make the wipe-and-flush phase inevitable: the longer you hold out, the bigger a prize that goodwill is, provided the thing is publically held and subject to this dynamic.

I don't know about that. A good part of Amazon's initial advantage was in their goodwill. Their reviews were (for a long time) pretty fair and would mark bad products as bad. Their customer service was always quite attentive.

I think in growth industries, the potential future of goodwill outweighs the value of expending that goodwill right now. Unless you've already lost the market -- but I don't think that'll be to prices as much as competitors offering more/better products.

Totally, 100% agree. That's the status quo.

Would it be possible to modify society to prevent such a competitor?

> If you don't know, John Mackey, the CEO / founder, is a major believer in conscious capitalism and of empowering his employees.


> “It’s more like fascism,” Mackey recently told NPR. “In fascism, the government doesn’t own the means of production, but they do control it — and that’s what’s happening with our health care programs and these reforms.”

> Mackey, a libertarian, compared Obamacare to “socialism” in a Wall Street Journal op-ed he penned in 2009. Obamacare would “move us much closer to a government takeover of our health-care system,” he proclaimed.

Obamacare is obviously closer to socialism, I think that was one of the main goals. His full article adds more context: http://www.wholefoodsmarket.com/blog/john-mackeys-blog/healt...

I disagree with almost every word of it, but I don't think it contradicts the idea of "conscious capitalism" or treating your employees well.

He also sort of regrets his "fascism" comment:

> "Well, I think that was a bad choice of words on my part ... that word has an association with of course dictatorships in the 20th century like Germany and Spain, and Italy. What I know is that we no longer have free enterprise capitalism in health care, it's not a system any longer where people are able to innovate, it's not based on voluntary exchange. The government is directing it. So we need a new word for it. I don't know what they right word is," Mackey says.

- http://www.npr.org/sections/thesalt/2013/01/16/169413848/who...

Although, fascism doesn't just have "an association" with dictatorships, that's literally what it means. Government controlling industry is basically a side effect.

I'm happy that he's willing to give those kinds of benefits to his employees when he doesn't have to. But I cannot have respect for someone that doesn't believe that everyone should have that.

Sounds like he's demonstrating what being 'consciously capitalist' gets you: bought out, and your lifework cannibalized to please bottom-line hungry investors. Also known as 'you can't have nice things'.

So basically, leave out the 'conscious' as it is disposable. Good to know.

So he believes in empowering his employees, and is principled.

Amazon usually is mostly hands off to acquisitions like these. Look at Zappos and Twitch. I think that what will occur is probably some kind of service that they will tie into Prime Membership. Maybe also integrate things from their prototype store. Usually Amazon enhances experience in this acquistion and they are free to do what they want. Nothing will happen to their employee culture.

In my view, the customer base is more important than the actual business, and so it may or may not retain its current form over time - my guess is that it will morph into Amazon's vision for retail. I bet 95% of WF shoppers are prime members already - ie. people with disposable income - and patronage and walletshare from that demographic is what Amazon values.

Here comes store automation and hefty lay-offs?

If it's any consolation, this was just a matter of time. The next 30 years will be "interesting."

It should be noted that amazon employees also "get paid pretty darn well with some crazy good benefits" and the whole IT at amazon is union free.

I feel like this is a great fit, with whole foods being a progressive company in US grocery space.

No one is arguing that the people who work on Whole Food's website are going to suffer a significant drop in the quality of their work experience.

It's a fair supposition, however, that Whole Food's front line staff (who map to the warehouse employees that Amazon absolutely treats like garbage) probably will.

> It's a fair supposition

Why? Reviewing any of Amazon's acquisitions shows that they have revenue targets that, when met, means they just don't get involved. Why suppose they are suddenly going to do the opposite now?

When you have a documented record of mistreating you're employees, both white and blue collar, the onus is on you to rectify the situation and demonstrate that you'll behave better in the future. Amazon has done neither of these things.

It's entirely "fair" to posit that a company with a documented record of abusive workplace practices might extend that same umbrella of mistreatment over an acquisition. Even more so given that the acquisition involves a large number of employees of the category that Amazon has always treated as disposable.

> When you have a documented record of mistreating you're employees, both white

Yes, the infamous NYT story. It's funny, because I've yet to see all the ugly that story implied was wide-spread across the company. AWS can be notoriously difficult (particularly the not-so-fun S3 on-calls).

But there's an enormous difference between a wide-spread problem, and a problem that seems to be focused, very narrowly, on a few teams.

> Amazon has done neither of these things.

You say that with authority. Do you have ANY familiarity with Amazon's internal policies/changes that have gone into affect regarding these news stories?

Here's my problem: A company of some 300,000 people had documented cases of mistreatment. You've, in turn, determined that not only is this problem so wide-spread that we can define Amazon as a "bad employer" but, apparently, they need to take the time to personally inform you of any changes that have been made as a result of said problems.

> might extend that same umbrella of mistreatment over an acquisition.

And yet, of Amazon's acquisitions every single one of them have been left to their own devices.

You seem to have an agenda, which is fine, but let's not pretend your summary is in any way based in fact, but rather, exclusively on a few articles in newspapers.

If I seem to "have an agenda" based on widespread media reports that are far beyond that one NY Times piece, how exactly would you categorize your own stance? What's your relationship to Amazon? I'm only one of their occasional customers.

Anyway, here's reporting about how their warehouses used Neo-Nazis to intimidate immigrant laborers and worked a temp to death. If you have evidence of the drastic measures that would need to be taken to prevent this kind of behavior, I'm happy to hear about it.



The first article is about a temp worker dying. One guy. The second article is about Amazon Germany, specifically that the security company they hired, allegedly hired neo-nazis.

You don't seem to have an agenda, you absolutely have one. What happened to that temp is tragic, but you can't get more isolated than 1.

> Anyway, here's reporting about how their warehouses used Neo-Nazis

You mean the company they hired that then hired some shitty people? I don't get why Amazon is now responsible for that.

Different people have different thresholds for what's "water under the bridge." That's fine. I've been a long time occasional customer of there's, but have become increasingly leery of their business and employment practices, both from media reports and people I know who've worked with them. I wouldn't want to be treated that way or see anyone I know treated that way either. That's what informs my views and comments. If you see it as an agenda, that's okay too.

But I only used the term "seem" because your framing is to position yourself as somehow more impartial and knowledgeable, while refusing to clarify your own relationship with Amazon and what informs your (in my view) similar stridency.

One guy is far too many. There is absolutely ZERO excuse for that happening.

I don't know the Amazon executives...but I would give them the benefit of the doubt that they appreciate fundamental differences between a low cost retailer and a high end retailer. Amazon needs to cut costs and find efficiencies every where they can because that is the nature of a business built on low price...I would assume and hope they realize that whole foods is a different type of business that requires happy customers and happy employees to fetch premium prices...I would hope!

Bezos creates a boiler room. Bezos, to me, is the most Machiavellian man alive and the arms race he started is being emulated by the likes of Jack Ma. This will not lead to happier people. Spying, advertising, fake and low quality products and constant consumption and consumerism is the goal of scamazon. I do like whole foods, a bit expensive, I use co-ops when possible to source food, but Amazon will make sure to gut headcount and compromise on quality anywhere possible to make an extra penny. Bezos farms all this money simply to be the richest and to play with rockets in space while we all suffer from shrinking middle class, lower education standards for most, cancer and an energy crunch. Bezos is dangerously smart, possibly the smartest business man alive or ever, but he is just not a good man. Every one of his successes requires the original to be sacrificed at their hands. using their infrastructure - aws - guarantees that if you are successful there Bezos will steal your model and compete with you.

I knew whole foods was falling at the hands of Costco, organic for cheaper, but whole foods had great variety and did try harder than all the other big-chain food stores.

Every scamazon victory feels like a loss of the world.

Time to bust this trust. Time for regulators to start breaking scamazon up.

I think you can draw a line between this and Zappos. Before being acquired by Amazon, it had a crazy amazing working culture and customer service reputation, and it still does: in fact, that's why Amazon bought it. They wanted to learn from that culture and bring it to Amazon.

I doubt WF is going to find themselves watering things down - I think they are going to be spending their time learning something from Amazon about logistics and data-driven growth, but they're going to spend a lot of time teaching Amazon about how running a store that has fans as much as it does customers, about how to make that work.

That means they will have to stay true to their cause: Fair Trade and organic deals are part of WF's core brand, and if they remove them, they will lose their fans. What Amazon will want to figure out is how to make that more economic by scaling it. It might be the best thing to happen for animal welfare in the food chain this generation.

Store automation is an interesting one. What Amazon have been trying to figure out is how to take away the pain points of stores (queueing), but that does not mean all staff are removed. Stock needs checking, shelves need stacking, and in my local supermarkets the checkout is already semi-automated, but I still have to queue. Amazon's plan is just to take that further. Does it mean you could have fewer staff? Yes, of course, but you could also decide instead of growing profits, grow the brand: redeploy those staff into genuine customer service roles.

It's an interesting move, I think. I don't think you need to be alarmed if you're at WF, you need to be alarmed if you're at Walmart, Tesco or any other major food retailer anywhere on the globe though.

Amazon bought Zappos forever ago and their unique culture seems to have been preserved. Amazon doesn't necessarily fully assimilate their subsidiaries, especially when that subsidiary has a charismatic CEO who remains in place. If Mackey stays around, Whole Foods is probably still going to be Whole Foods for some time.

When they bought Zappos it seems like they pretty much left the culture alone but helped streamline their backend. Maybe they're planning something similar? I can't see Whole Foods becoming the Wal-Mart of organic produce without completely killing their brand.

> Oof. I wonder what this means for Whole Foods culture and employees. > If you don't know, John Mackey, the CEO / founder, is a major believer in conscious capitalism and of empowering his employees. > Whole Food employees get paid pretty darn well with some crazy good benefits for their industry and line-of-work (UNION FREE most of the time too!).

You know, if they had unions than an acquisition wouldn't really have a negative effect on their benefits

If all of that stuff goes away from WF, it becomes any other supermarket. I think Amazon is smart enough to know that WF is fundamentally different from Amazon.com - the former is purposely niche, while the latter is purposely mass market.

I'd think Amazon would have bought another grocery chain if they fundamentally didn't want the WF business model. We'll see, though.

I don't think there's a significant incentive for Amazon to change Whole Foods. The real gains will be from automating the supply chain, including applying machine learning to quality control. Amazon already grades strawberries that way.

I doubt WF culture is even a fraction as extreme as also-owned-by-AMZN Zappos.

Probably best to look at Zappos, Woot and other past acquisitions.

How did that work out for the employees?

Amazon didn't terribly Amazon-ize the culture at Zappo's, AFAIK; that's at least an existence proof that they don't always do that.

> Here comes store automation and hefty lay-offs?

... or just expand and move people to new stores. Seriously, what's the yearly turnover for front-line positions?

At least in my experience, a lot of employees at the store live and die for the company. Tons of growth / mobility. Lots of 5+ year long employees...

Sure, but I can't imagine every clerk who signs up for the job stays there forever. Even a 15%-25% attrition rate would allow the company to invest in automation without having to resort to layoffs.

I worked for Palo Alto Whole Foods from 2008-2011, and I think one thing that really hurt the company was that they aggressively overexpanded.

Does Santa Cruz need two stores (Capitola is practically Santa Cruz)? A Blossom Hill store? Competing with Los Gatos and Campbell?

At the time (I was s cashier) WF culture was dead set against self checkout stands, because they really wanted someone to be there to help customers.

They have also over expanded in Berkeley/Oakland. Three WF between Lake Merritt and Albany is too many, and they are opening a 4th. They should open more in other parts of the East Bay, such as San Lorenzo, Freemont, other parts of Oakland, etc.

Only the 27th street WF is as good as the many, many other natural/whole/organic foods stores there.

They finally opened in Fremont a few years ago. A decent choice (though it cannibalizes some customers from PA)

> At the time (I was s cashier) WF culture was dead set against self checkout stands, because they really wanted someone to be there to help customers.

As opposed to having longer checkout lines? How about investing in a non-shitty self checkout stand?

Hopefully it is mostly a strategy for Amazon to cover another type of business amd another type of selling point. Broadening their spectrum. Hopefully.

This is exactly what came to my mind. I hope Amazon keeps the Whole Foods culture alive and let it run independently.

You don't spend $15B on something known for its strong culture and then gut the culture.

guess John Mackey probably worked these into the terms of the deal. The glass half full view is hopefully - the employees have more time and are more focused on interacting with customers and educating them about all their esoteric inventory!

i don't think it'll change much. it's in Amazons best interest to keep whole foods the same. any changes to its culture would make them lose even more customers and whole foods has been on a decline the past few months.

You added "UNION FREE" like it's a good thing. Funny.

why are you excited about union-free stuff

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