Game Changer...Amazon buying "Whole Foods"

[Obliviax]

mark that date, this is a game changer. Whole Foods will delivery your groceries to your door in many of their locations today. Aligning WF with Amazon improves the order and delivery pipelines. Add in driverless cars and you've got an incredible change in how people shop and buy.

Game changer.

 

[mn78psu83]

mark that date, this is a game changer. Whole Foods will delivery your groceries to your door in many of their locations today. Aligning WF with Amazon improves the order and delivery pipelines. Add in driverless cars and you've got an incredible change in how people shop and buy.

Game changer.

It is just that. Game changer.

 

[Mack_Daddy]

mark that date, this is a game changer. Whole Foods will delivery your groceries to your door in many of their locations today. Aligning WF with Amazon improves the order and delivery pipelines. Add in driverless cars and you've got an incredible change in how people shop and buy.

Game changer.

Do they except bitcoins, yet?

 

[michnittlion]

Maybe. Amazon is going into a business where margins are considerably slimmer (and costs are higher) vs. where they've already been playing.

It's a popular saying that e-commerce's biggest issues are as regards the last mile of distribution. This will undoubtedly help Amazon in that regard.

 

[mn78psu83]

Maybe. Amazon is going into a business where margins are considerably slimmer (and costs are higher) vs. where they've already been playing. Is this a space worth playing in?

It's a popular saying that e-commerce's biggest issues are as regards the last mile of distribution. This will undoubtedly help Amazon in that regard.

With both Lidl and Aldi entering the US market from Germany, WMT and Costco already in a price war that has in the near term crushed even the likes of market darling Kroger ... margins are slim. Of course, Whole Foods is a higher margin business and AMZN has demonstrated that they are in it to win it. They will compete at all levels.

 

[Obliviax]

Do they except bitcoins, yet?

yes...since 2014.

 

[AldenT]

This is as much about having delivery hubs in upper class neighborhoods as it is selling manchego to yuppies. It's another user interface for Amazon and helps eliminate the most difficult, costly, and time consuming area of the distribution chain.

Bezos is a genius.

 

[michnittlion]

This is as much about having delivery hubs in upper class neighborhoods as it is selling manchego to yuppies. It's another user interface for Amazon and helps eliminate the most difficult, costly, and time consuming area of the distribution chain.

Bezos is a genius.

That is true.

It's no accident they bought a chain that has 15 stores in the Metro Denver area but only 2 stores in Metro Cincinnati. (choosing my latest 2 hometowns here)

Denver is bigger than Cincinnati - but not that much bigger. But Denver is considerably different in terms of the propensity of the population to leverage e-commerce.

 

[BiochemPSU]

I wonder if in 20 years the phrase "can you stop by the grocery store on your way home from work?" will be the equivalent of today's "have to rewind the tape before we return it to Blockbuster."

 

[artsandletters]

I'll go to the supermarket and pick out my own fruits, vegetables, meats etc. No thanks.

 

[michnittlion]

With both Lidl and Aldi entering the US market from Germany, WMT and Costco already in a price war that has in the near term crushed even the likes of market darling Kroger ... margins are slim. Of course, Whole Foods is a higher margin business and AMZN has demonstrated that they are in it to win it. They will compete at all levels.

Aldi's definitely pressured grocery stores. Seems like I first saw Aldi in 1999, so they've been around awhile.

I just don't know about getting too much into the "game" as regards things like fresh produce. Canned goods, sure - no need to touch them. But not everything in the grocery store is created equal: even amongst the Millennial and younger crowd.

 

[ClarkstonMark]

way over paid imo

 

[BBrown]

I'll go to the supermarket and pick out my own fruits, vegetables, meats etc. No thanks.

Yea but think of the Alcohol and hopefully weed.

 

[mn78psu83]

way over paid imo

Time will tell, but AMZN's market cap is up more today on the news than what they are paying. AMZN and TSLA are two market darlings. Never seen anything quite like it. A company announces that they're shelling out $13.7 billion to buy another company and the buying company's market cap goes up by $15 billion +. Amazing.

Edit: AMZN closed up $23.54 @ 478 million shares = market cap gain of about $11 1/4 billion. Point remains.

 

[mn78psu83]

Aldi's definitely pressured grocery stores. Seems like I first saw Aldi in 1999, so they've been around awhile.

I just don't know about getting too much into the "game" as regards things like fresh produce. Canned goods, sure - no need to touch them. But not everything in the grocery store is created equal: even amongst the Millennial and younger crowd.

Have you been to a Lidl or Aldi store? Just curious. The move to the US is creating quite a buzz in the supermarket world.

 

[RochLion]

Wegman's started grocery delivery in MD and VA this week. They must see the writing on the wall. My Aldi receipts are still about 60% of Wegs every time I go.

http://rbj.net/2017/06/15/wegmans-starts-grocery-delivery-in-va-md-markets/

 

[BBrown]

Have you been to a Lidl or Aldi store? Just curious. The move to the US is creating quite a buzz in the supermarket world.

Have never been to Lidl. I've been to a few Aldi's and have come away unimpressed. Some are nice but the 2 around me are pretty lame. Nothing that I would get overly excited about.
Now if they had a Trader Joe's in my hood, that I would get excited about.

 

[mn78psu83]

Have never been to Lidl. I've been to a few Aldi's and have come away unimpressed. Some are nice but the 2 around me are pretty lame. Nothing that I would get overly excited about.
Now if they had a Trader Joe's in my hood, that I would get excited about.

I hear ya. We love our little Trader Joe's in State College. I would go there for the dark Belgian chocolate bars alone.

 

[BBrown]

Wegman's started grocery delivery in MD and VA this week. They must see the writing on the wall. My Aldi receipts are still about 60% of Wegs every time I go.

http://rbj.net/2017/06/15/wegmans-starts-grocery-delivery-in-va-md-markets/

Yea kind of agree. Aldi's canned and boxed food is fine. I'm not a fan of their produce and or meat. And man you cannot beat Wegmans Deli, Meats or cheese section and their Prepared foods are some of the best I've ever had. But it aint cheap.

 

[BBrown]

I hear ya. We love our little Trader Joe's in State College. I would go there for the dark Belgian chocolate bars alone.

Oh man those things are awesome.

 

[flavorguy]

I'm on the flip side of this... I sell ingredients into grocery and beverage products. The brand name products are the ones who get beat up. Lower margins on the retail side means push back on the suppliers into the category. This many times means loosening of quality standards, reduction of "servings" or "serving size per package" and less innovation. Whole Foods normally receives a hefty premium due to the organic nature of their products. It will be interesting to see how this plays out. Consumers win in the short run...

 

[mn78psu83]

Yea kind of agree. Aldi's canned and boxed food is fine. I'm not a fan of their produce and or meat. And man you cannot beat Wegmans Deli, Meats or cheese section and their Prepared foods are some of the best I've ever had. But it aint cheap.

I always go to Wegman's with a disciplined outlook on the food aisles.

 

[michnittlion]

Have you been to a Lidl or Aldi store? Just curious. The move to the US is creating quite a buzz in the supermarket world.

Yep, I've been to Aldi. First saw them around 1999 (as I recall) when I was living in Metro Detroit, so I stopped in.

They were fine, I don't think they were selling low-quality foods, although I will admit I prefer buying the mainline brands (which are often not stocked at all in an Aldi) when I buy food.

Never seen a Lidl store - either where I live or in traveling.

 

[mn78psu83]

Yep, I've been to Aldi. First saw them around 1999 (as I recall) when I was living in Metro Detroit, so I stopped in.

They were fine, I don't think they were selling low-quality foods, although I will admit I prefer buying the mainline brands (which are often not stocked at all in an Aldi) when I buy food.

Never seen a Lidl store - either where I live or in traveling.

LINK: Lidl opens first stores in US - Hampton and Virginia Beach, VA

 

[michnittlion]

I'm on the flip side of this... I sell ingredients into grocery and beverage products. The brand name products are the ones who get beat up. Lower margins on the retail side means push back on the suppliers into the category. This many times means loosening of quality standards, reduction of "servings" or "serving size per package" and less innovation. Whole Foods normally receives a hefty premium due to the organic nature of their products. It will be interesting to see how this plays out. Consumers win in the short run...

True.

No accident that the likes of General Mills are also down -3% today (stock price).

 

[fkkkjm]

Time will tell, but AMZN's market cap is up more today on the news than what they are paying. AMZN and TSLA are two market darlings. Never seen anything quite like it. A company announces that they're shelling out $13.4 billion to buy another company and the buying company's market cap goes up by $15 billion +. Amazing.

Agreed. People are forgetting that at some point Amazon and Tesla need to turn a profit. Investors are lulled right now I don't think either have paid any dividends to this point. Crazy.

 

[michnittlion]

LINK: Lidl opens first stores in US - Hampton and Virginia Beach, VA

Thanks.

Will keep tabs on how they do in the years to come. The grocery category is interesting to follow, for sure.

 

[ThePennsyOracle]

I hear ya. We love our little Trader Joe's in State College. I would go there for the dark Belgian chocolate bars alone.

I wish we had Aldi too!

To comment on the larger thread, I don't think this is about Amazon going heavy into the grocery delivery business.

Bezos has a habit of buying companies and let them run on their own while tinkering behind the scenes. I won't be surprised if we start to see Whole Paycheck stores in more places, and with cheaper products....acting as distribution points & storefronts for Amazon products.

 

[ThePennsyOracle]

I wish we had Aldi too!

To comment on the larger thread, I don't think this is about Amazon going heavy into the grocery delivery business.

Bezos has a habit of buying companies and let them run on their own while tinkering behind the scenes. I won't be surprised if we start to see Whole Paycheck stores in more places, and with cheaper products....acting as distribution points & storefronts for Amazon products.

Not to go Bushwood responding to my own posts...but....

Don't forget that Amazon has a ton of private label products now. They've got everything from batteries & charging cables to linens and chinos.

So, it's more about taking on WalMart and Target to be the be-all, end-all of shopping than anything else.

 

[Obliviax]

I wish we had Aldi too!

To comment on the larger thread, I don't think this is about Amazon going heavy into the grocery delivery business.

Bezos has a habit of buying companies and let them run on their own while tinkering behind the scenes. I won't be surprised if we start to see Whole Paycheck stores in more places, and with cheaper products....acting as distribution points & storefronts for Amazon products.

Hmmm....WF has people that want high quality, but expensive food. This means busy people with money. Amazon gives you a simple online shopping experience with an excellent supply chain/delivery mechanism.

What to do, what to do?

Three years, max.

 

[ThePennsyOracle]

Hmmm....WF has people that want high quality, but expensive food. This means busy people with money. Amazon gives you a simple online shopping experience with an excellent supply chain/delivery mechanism.

What to do, what to do?

Three years, max.

Bingo.

And there's no way competitors can keep up. They just don't have the funds--even WalMart.

 

[PSU87]

Yep, I've been to Aldi. First saw them around 1999 (as I recall) when I was living in Metro Detroit, so I stopped in.

They were fine, I don't think they were selling low-quality foods, although I will admit I prefer buying the mainline brands (which are often not stocked at all in an Aldi) when I buy food.

Never seen a Lidl store - either where I live or in traveling.

Aldi is hit or miss. Some things from there are fine....some are nearly inedible.

 

[mn78psu83]

Not to go Bushwood responding to my own posts...but....

You mean Kraken.

 

[jmorovich]

 

[AldenT]

Walmart is going to be doing something similar as well. Brick and mortar food chains will have to reinvent themselves. Walmart just invested heavily in some online tech company's to keep pace with amazon.

Don't they own jet.com?

 

[Nitwit]

With both Lidl and Aldi entering the US market from Germany, WMT and Costco already in a price war that has in the near term crushed even the likes of market darling Kroger ... margins are slim. Of course, Whole Foods is a higher margin business and AMZN has demonstrated that they are in it to win it. They will compete at all levels.

Wonder if Target will become a target to be bought out, or even Kohls. Both are more mid market than Walmart or Costco, and have a unique market niche, but are smaller then the "big boys" of retail. Any opinions?

 

[artsandletters]

Wegman's started grocery delivery in MD and VA this week. They must see the writing on the wall. My Aldi receipts are still about 60% of Wegs every time I go.

http://rbj.net/2017/06/15/wegmans-starts-grocery-delivery-in-va-md-markets/

Giant delivers.

Schwan's delivers to Cruisin' 66. He likes to stick his head in their freezer compartments to cool off.

 

[artsandletters]

Yea but think of the Alcohol and hopefully weed.

The only time I smoked a joint was in NYC. I got arrested for trying to give a hickey to the Statue of Liberty. (Woody Allen paraphrase)

 

[PSU Mike]

I wonder if in 20 years the phrase "can you stop by the grocery store on your way home from work?" will be the equivalent of today's "have to rewind the tape before we return it to Blockbuster."

You mean I can return them as-is now and Blockbuster will rewind them? Greatest day of my life!

 

[mn78psu83]

Wonder if Target will become a target to be bought out, or even Kohls. Both are more mid market than Walmart or Costco, and have a unique market niche, but are smaller then the "big boys" of retail. Any opinions?

I have no idea about M&A with either of these. You know the rumor yesterday was that AMZN was buying SLACK. I've been looking at TGT and it "seems" cheap here. They now have a 4.9% dividend with a payout ratio just under 50% - that's as high as I like to see it. They still generate substantial free cash flow and they have a good niche business. OTOH, they are losing foot traffic, the competition is heating up (every real or perceived gain by AMZN hurts the older retailers) and the retail industry is currently a market dog. It's either a good value play or a value trap. I don't follow Kohl's. Macy's (M) is the retail stock most often mentioned as a takeover target these days.