Amazon reportedly planning to cut jobs at Whole Foods
- Author: Carolyn Briggs Jun 19, 2017,
Jun 19, 2017, 16:40
By acquiring a major retailer, Amazon now has access to the real time choices of shoppers, and all that this could reveal. However, despite launching its Amazon Fresh food delivery service over a decade ago, the company accounts for less than 0.5 percent of grocery spending in the U.S. today.
It is not strictly limited to food but to all groceries instead, and it simply allows for a wider selection and faster delivery time of such products than normal Amazon.
Through Whole Foods' 460 stores in the U.S., Canada, and the U.K., Amazon gains new footholds into its food distribution network, making the logistics and coordination of delivering fresh foods to your doorstep more possible.
One analyst said the deal "shakes the industry to its core" and is " potentially terrifying" for other grocers.
As O'Shea said, the ramifications of the two deals will be "not just for food retail, but for retail in general".
"This could annihilate them", Jetta said.
Amazon isn't the only company threatening to shake up the industry.
"This private corporation already dominates every corner of online commerce, and uses its power to set terms and prices for numerous most important products Americans buy or sell to one another", Lynn said. Additionally, the company's financial performance in recent years may have hindered its expansion plans, he said. The company's same-store sales - a closely watched measure - have declined for seven straight quarters. Walmart's purchase of online retailer Jet.com for $3 billion previous year was perhaps beginning of this rivalry. Overall, the company's USA online sales rose 63 percent last quarter. Lidl intends to open 100 by the end of 2018, and Kantar Retail believes it could have 600 across the country by 2023.
Amazon can afford the losses if it can manage to attract more Prime members, as it's aiming for with its recent lower price for lower-income households policy.
It's not yet clear what changes (if any) Amazon plans to make with Whole Foods. A Fire smartphone launched in 2014 flopped, but Amazon continued in hardware with its voice-activated Echo speakers, sparking a new market of home assistants powered by artificial intelligence. It wasn't successful and the company retreated almost five years ago.
The stakes are highest for Wal-Mart.
Wal-Mart may be ready. German discounters Aldi and Lidl are battling Wal-Mart, which controls 22 percent of the US grocery market, with each vowing to undercut whatever price the others offer. While the firm now has around 460 stores worldwide, it has struggled to maintain growth in recent years.
"It doesn't mean it works here in the same way, but you've got to get sharp on pricing", Stern said. That's a direct appeal to one of Wal-Mart's prime target demographics. "But they've got the most at risk in some sense".
"We believe there could be some money left on the table", Parikh said in a note to clients.
Coffee and tea took the third and fourth spots among Amazon.com grocery sales; wine and juice also fell within the top ten top-selling products. If the "automated retail location" idea is popular and takes off, it will result in the loss of millions of jobs in retail locations across the board, not just in grocery stores. While he is more comfortable with where Wal-Mart now stands, McMillon acknowledged there is work to do. "I want to keep working", said the worker, who did not want his name used.
"Amazon's acquisition of Whole Foods is one of those".
In other words, Amazon wouldn't just get the Whole Foods brand; Whole Foods would also be able to bring in some of Amazon's low-priced, reasonably high-quality store-label goods. Whole Foods will continue to operate under its own brand, with the acquisition expected to close sometime in the second half of this year. "It's more choice, more competition and cheaper stuff".