Resultados 1 a 4 de 4
  1. #1
    WHT-BR Top Member
    Data de Ingresso
    Dec 2010

    [EN] Price isn’t everything

    Izabella Kaminska

    Amazon’s takeover of Whole Foods looks set to complete on Monday, and the Everything Mega-Monopoly Store has already announced there will be price cuts on everything from avocados and bananas to organic eggs and responsibly farmed salmon.

    Share prices of competing retail stocks shuddered in response understandably.

    But should they really be that worried?

    Amazon may be exceptionally accomplished at managing warehouses and logistics, which are seamlessly integrated into an online purchasing experience. But the conglomerate is much less accomplished at dealing with the awkward and annoying reality of real-world customer-facing operations.

    Nor does Amazon have much experience with the high-end, fussy-as-hell “price is no barrier to us” spectrum of the market.

    So here’s the issue with Amazon’s sensational price cutting policy.

    It mostly serves the interests of bargain hunters who are happy to waive “experience” in exchange for cheaply priced goods obtained any old way possible (i.e. sans glamorous setting, sans sophisticated packaging and sans convenient retail presence) . It doesn’t necessarily serve the interests of the “quality and experience comes before everything” customer segment.

    If Whole Foods customers wanted cheaper organic avocados, they’d already be shopping at Waitrose, Sainsbury, Costco or Walmart.

    They, however, opt to shop in Whole Foods precisely because it represents an overt act of conscious inefficiency.The same impulse drives the same type of customer to overspend for vegan organic burgers at Borough market.

    Brandon Fletcher at Bernstein echoes a similar point on Friday. As he observes (our emphasis):

    The quinoa elite and main line groceries serve different customers and don’t directly translate. Second, the funding source of an inefficient WFM is large, but not inexhaustible. It is notable that the list of items with price reductions are important items, but not really that broad. This is more like a sale than a permanent roll back of ‘whole paycheck’ pricing. As Amazon gets WFM costs down it will pass all the savings down in price, but it is hard to see that gap to Costco (which we shared before as being 30-80 percent) closing. Walmart just plain does not sell the same items nor serve the same customers.

    And he offers a thought experiment to boot.

    Had Whole Foods announced a similar price cutting policy independent of the Amazon acquisition, would WFM stock have gone up or down? Chances are the answer is down, because the WFM model depends on higher costs to provide assortment and service.

    So his point is, yes, Amazon can subsidise anything if it puts its heart to it. But that doesn’t mean it’s necessarily adding value.

    And here’s the key conclusion:

    …at some point if their actions are value destruction and not disruption, the narrative may change as you can disrupt infinitely, but destroy only to the limits of the balance sheet. We think that speed limit leaves the strongest incumbents largely unharmed. Walmart, Target, Costco and Dollar General will face pressure but will survive based on their strategic differences from Amazon.

    This is fundamental not just to the Whole Foods acquisition, but to Amazon’s entire expansion plan. If what Amazon really is is a value destroyer rather than a value disrupter, all its mega monopoly policy of undercutting-competition-until-it-dies will do is lower quality for everyone in the long run.

    For the discerning quality-obsessed customer, that’s never going to cut it. Luxury retailers will always offer an edge. And for Amazon that’s a problem, because you can’t disrupt a luxury experience with technology. The whole point of a luxury “organic” “farmer’s market” experience is purposeful inefficiency.

    Price isn’t everything.

  2. #2
    WHT-BR Top Member
    Data de Ingresso
    Dec 2010

    Senator questions quick approval of Amazon's Whole Foods purchase

    David Shepardson
    August 25, 2017

    A U.S. Democratic senator on Friday questioned the Federal Trade Commission’s quick approval of Inc’s purchase of Whole Foods Market Inc this week, less than three months after the $13.7 billion deal was announced.

    The FTC said on Wednesday that it had ended its antitrust investigation without seeking a second request for additional information on a deal that has sent shock waves through the grocery industry.

    Senator Amy Klobuchar of Minnesota said in a statement on Friday that she was concerned about the FTC’s decision to “not fully review” the deal, which was announced on June 16.

    “Amazon’s increased access to data on consumers and their behavior, and its dominance in internet retail sales, raises questions about whether this merger harms consumers and suppresses competition,” she said.

    Klobuchar said she would ask the FTC to explain why it made such a quick decision.

    Seattle-based Amazon declined to comment. The FTC did not immediately reply to a request for comment.

    After getting the approval of the FTC and Whole Foods shareholders this week, Amazon said on Thursday that it planned to complete the acquisition on Monday and simultaneously introduce lower prices on some grocery staples.

    The world’s biggest online retailer also said it planned to start selling some Whole Foods-branded products on its website and offer incentives to its Prime members at Whole Foods stores.

    Shares of major grocery stores fell sharply on Thursday on fears that Amazon’s move would spark a new round of price wars in the industry, but they recovered somewhat on Friday.


    Congressional Democrats in July proposed taking a harder line on mergers and strengthening antitrust laws to give regulators more tools to block such deals or revisit those that were previously approved. "Growing corporate influence and consolidation has led to reductions in competition, choice for consumers, and bargaining power for workers," as well as higher prices, they said.

  3. #3
    WHT-BR Top Member
    Data de Ingresso
    Dec 2010

    The Whole Fields Deal: Three Factors Limiting Amazon's Power

    Mark Fritz
    August 25, 2017

    There are limits to how much pricing power, Inc. can wield if it tries to subsidize its grocery goods in order to crush its competitors the usual way, Bernstein analyst Brandon Fletcher believes.

    The Federal Trade Commission this week approved Amazon’s acquisition of Whole Foods Market, Inc. The retailer, which closes the $13.7 billion deal Monday, listed a full range of items that would immediately see price reductions.

    Whole Foods Customers Don’t Buy Soda Pop

    In an analyst note, Fletcher listed three things that limit Amazon’s ability to try and take down Wal-Mart Stores Inc, Target Corporation, Costco Wholesale Corporation and Dollar General Corp.

    • Different demos: “The quinoa elite and mainline groceries serve different customers and don't directly translate.”

    • Range of reduced items are not that broad: “This is more like a sale than a permanent roll back of 'whole paycheck' pricing,” he wrote. “Walmart just plain does not sell the same items nor serve the same customers.”

    • Grocery logistics are notoriously tricky: “(It) will take time to integrate in a way that lowers costs enough, broadens assortment enough, and increases locations enough to destroy the scale advantages. “

    Over-Subsidizing = Destruction

    “Yes, AMZN can subsidize anything, but at some point if their actions are value destruction and not disruption, the narrative may change as you can disrupt infinitely, but destroy only to the limits of the balance sheet,” he said.

    “We think that speed limit leaves the strongest incumbents largely unharmed.”

  4. #4
    WHT-BR Top Member
    Data de Ingresso
    Dec 2010

    Amazon-Whole Foods Deal Details Shouldn't Surprise Anyone, Least Of All Grocer Invest

    Wayne Duggan
    August 25, 2017

    On Thursday,, Inc. announced that it will officially complete its merger with Whole Foods Market, Inc. on Aug. 28. The e-commerce giant also revealed details of how the two companies will team up in the grocery space. Jefferies analyst Christopher Mandeville said there were no major surprises in the plan.

    Amazon will begin lowering prices on select Whole Foods products starting next Monday with items such as organic avocados, organic brown eggs, organic salmon and organic rotisserie chicken. Additional price roll-backs will be happening in the months ahead.

    Amazon Prime will now become Whole Foods rewards program and provide exclusive discounts to members. Whole Foods’ 365 private label products will now be available online via, and Amazon will be installing online pick-up and return lockers in Whole Foods stores as part of its omni-channel grocery strategy.

    For traders looking for opportunity in the grocery space in the Amazon era, Mandeville says there will only be one true winner.

    “The future unknown is what should continue to concern investors. In our view, the WFM/AMZN marriage will have major L-T ramifications for the entire grocery vertical (vendor/distributor/ retailer), forcing investment in price/quality and the experience (in-store and digitally), with the only true winner being the consumer,” he wrote.

    According to Mandeville, the only good news for investors of rival grocery stores such as Kroger Co, Target Corporation and Wal-Mart Stores Inc in the near term is that the stocks have already been punished for Amazon’s entry into the market. He sees no reason they should be punished again.

    Jefferies maintains Hold ratings on Kroger and Target and a Buy rating on Walmart.

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