TALKING HEADS > Cramer goes NUTS
Amazon.com founder and CEO Jeff Bezos
Cramer: Amazon could dominate food retail for next two years with Whole Foods deal  
20 Mins Ago | 04:35

Amazon said Friday it plans to acquire Whole Foods Market for $42 a share, in a deal valued at $13.7 billion.

Whole Foods' John Mackey will remain CEO of the grocery store chain after the deal closes, and the store will continue to operate under the Whole Foods brand.

The deal is expected to close in the second half year.

"This partnership presents an opportunity to maximize value for Whole Foods Market's shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers," Mackey said in a statement.

Whole Foods has been under pressure from Jana Partners hedge fund and money management firm Neuberger Berman, which have called on Whole Foods to sell itself. The investors have criticized Whole Foods for its poor performance, and have suggested the chain could be merged with another grocer.

http://www.cnbc.com/2017/06/16/amazon-is-buying-whole-foods-in-a-deal-valued-at-13-point-7-billion.html

Target down 9%
WalMart down 5%
Costco down 6%
Sprouts down 11%
Kroger down 13%

No wonder Cramer went NUTS 

And Amazon is up 4%. Which works out to about $14 billion.

So basically they got Whole Foods for free.

Seems like a mismatch to me.  I can't see these two brands occupying the same space in the consumer's mind and it being a benefit.  Whole Foods shoppers go to Whole Foods because they think they are special, and need special foods that are a grade above what regular people would buy.  Amazon is a store for the masses.  This reminds me a bit of when Chrysler bought Lamborghini.

This guy called it in early March: https://www.youtube.com/watch?v=fvZ8mGZZins

>Seems like a mismatch to me.

Same.

Quote from: littleman on June 16, 2017, 06:06:51 PM
Seems like a mismatch to me.  I can't see these two brands occupying the same space in the consumer's mind and it being a benefit.  Whole Foods shoppers go to Whole Foods because they think they are special, and need special foods that are a grade above what regular people would buy.  Amazon is a store for the masses.  This reminds me a bit of when Chrysler bought Lamborghini.

My friend who used to call Whole Foods deli her "happy place" is an Amazon Prime customer (like most people I know).

Many of my purchases on Amazon are whole foods that are hard to buy or expensive at the local grocery store.

I haven't been in a Whole Foods in years, but a relatively low-income friend who lives near a Whole Foods said that when he compares prices, WF is pretty much the same as the grocery store for the same item and the reason the perception of high cost exists is because once inside the store, people buy all sorts of stupid herbal pills for their dogs* that they would never buy at FoodMax.

*Not a random example. 15-20 years ago, we lived around the corner from a Wild Oats and one day I went in there and the end-of-aisle display was herbal pills for your dog. Cost for a bottle that had a one-week supply: $47. But of course, your dog is family. Would you skimp on family?

https://twitter.com/chicagophotosho/status/875708981511163905

Bezos needed something to pair with his new jabbernet-enabled Dash Wand

https://www.amazon.com/Amazon-Dash-Wand-With-Alexa/dp/B01MQMJFDK

<added>

QuoteNow that Amazon's all bullish about hardware, thanks to the Echo's stratospheric success, the company's bringing back the Dash Wand with Alexa built-in. It's a nice bit of synergy. All of the barcode scanning and Amazon Fresh purchasing is still there, and now Alexa can do her thing as well, ordering items with voice, pulling up recipes, finding out the nutritional content of an item. You know, Alexa being Alexa.

At the moment, the item is available for Prime Members only.

...It also comes with a free 90-day trial of AmazonFresh.

https://techcrunch.com/2017/06/15/amazons-dash-wand-barcode-scanner-returns-with-alexa-and-is-now-essentially-free/

Quote from: littleman on June 16, 2017, 06:06:51 PM
Seems like a mismatch to me.  I can't see these two brands occupying the same space in the consumer's mind and it being a benefit. 

They don't need to occupy the same space if they stay as separate brands.

Share a common back end & the ability to cross-sell some goods from a common inventory set, but maintain separate public-facing brands.

Much like Walmart acquiring Jet, Bobonos, ModCloth, MooseJaw, Shoebuy & Hayneedle.

Food is the most stagnant category in terms of e-commerce displacing physical stores. This is a way for Amazon to collect the associated share of wallet & consumer data without it taking 10 years to get to any sort of scale. And if they can pay to put lockers in 7/11 while Walmart gives customers discounts for picking up items in store then Amazon could do something similar with offering discounts to drive foot traffic to Whole Foods stores & help contain their shipping costs.

I think this is just a cheap buy for them that's profitable and a built in delivery platform for food. I think it's going to be big and the switch to ordering online and getting delivery or drive by pickup for the masses will come quicker than we think.

Amy is doing it now at WalMart where they just started offering to shop online, she picks a time for pickup for a 1.5 hour window. She gets out of the car to open the trunk and that's it, have had this about 2 months.

I think this is going to be Amazon's response to that new service.

What aaron & Drastic said

Makes perfect sense to me.
We rarely go to whole foods
We do buy @ Amazon Prime because we can  
Our main markets are COSTCO & Trader Joe's because we are special 

If it were the old Yahoo buying Whole Foods it would fail.

But with Bezos and Amazon buying it, I can see them pulling it off.  Bezos is always thinking 5 or 6 moves out and sees opportunities that the rest just cannot comprehend or if they comprehend can't pull off.

I'm still trying to wrap my mind around buying groceries through Amazon online.  Never been in a Whole Foods.  All I know is Aldi won me over when they started to accept credit cards - complete game changer for buying the basics.

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