Amazon Purchases Whole Foods – My Thoughts

Amazon is huge and just like most, I use it regularly. In fact, we are Prime members because it helps when we are somewhere we cannot get what we need any other way. Since my wife and I travel, getting things delivered to us is very helpful.

However, we don’t use Amazon for food and I don’t know that we ever will. We have been meaning to try the Thrive Marketplace, but lately, we have depended on local grocery stores, farmer’s markets and a little bit on Wal-Mart, but not much. I am not sure I want to trust Amazon with my food needs as we are already very picky about what we put in our bodies.

Good or Bad?

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I don’t know that this acquisition is good or bad, to be honest. It could be either, depending on what the powerful people at Amazon decide to do. Of course, it could mean very little if those thinking World War 3 is only days away are right.

I think the deal is more about giving Amazon more than 400 new locations to use as mini distribution centers so that they can reach those they want to reach with grocery delivery. It may lead to more, but I think this is the big play here for Amazon. I am not sure it was worth nearly $14 billion, but if you have it, you might as well spend it, right?

What’s Interesting About This Deal and Amazon Overall

From a business standpoint, it’s interesting that an ecommerce giant has started opening brick and mortar locations. I am sure many thought the brick and mortar business model was on the way to being dead, but Amazon decided they need actual stores for customers to come in and shop at.

Buying Whole Foods is another move in this direction as they will likely use the stores for more than just distribution. It would be silly to think Amazon will just stop letting customers come in and shop at the stores. I think this is a plan to help them move even more in the direction of brick and mortar, not that their website is going away anytime in the next 100 years. Again, unless World War 3 breaks out.

My biggest issue with this deal is the size of it and how much bigger it makes Amazon. We are quickly approaching a world with a huge separation of companies either making billions or trillions in profit or barely enough to survive. Personally, I think Whole Foods has sold out, but $13.7 billion is not easy to turn down.

This reminds me of the craft beer industry as so many micro brews just want a big company to buy them out and give them that once-in-a-lifetime payday. Sounds great, but it’s selling out as Budweiser and Coors love to take good beer and ruin it. Amazon may do this with Whole Foods, but only time will tell.

Personally, I am not a huge fan of this merger (purchase), but it’s not up to me. I doubt we will stray from our use of farmer’s markets, local grocery stores, farm markets and a little bit of Wal-Mart to fill in the very few blanks.

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