Most businesses that go outside their area of expertise fail. Fortunately AMZN is way to big of a company to fail but they have NO experience in retail food stores, let alone brick and mortar operations. WF will be absorbed and ruined in good time. WF is the genius in this deal selling out now before the increased organic food competition kills them eventually, so they are cashing out on top. AMZN will eventually have a dead weight grocery chain on their hands ruining it with their discount online retail approach. As I said AMZN is so huge it will not be a big deal if the combination fails. But kiss WF goodbye starting this year, may take some years to die but you heard it here first.
Hah....Amazon buying wholefoods ....wow!!! What an awkward buyout...
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Amazon has a much longer term play at work here. They are now testing cashier-less stores in Seattle. Basicly you just take what you want of the shelf, swipe it and it gets charged to your Amazon account. Cashless purchase. Think of this technology in every store, and I mean everything. Grocery, restaurants, fast food, all retail, Amazon grabs it all. You'll have your Amazon credit line and make all purchases with no cash. Don't be surprised if you soon see an Amazon direct deposit for payroll just like the bank. Five years out they own the world.
As much as I can't disagree with this in terms of where technology is going, what happens when you eliminate jobs that people need in order to make money to buy stuff? I have no idea what the curve would look like for variables such as higher efficency and cost savings vs. less people employed, but certainly this must be a factor.
If the truck that delivers the goods has no driver, and if the store that sells you the goods has no cashier, and perhaps if the shelves are also stocked by robots, then how do people make money to pay for the stuff they want to buy? The wealth will be concentrated even more by those at the very top who come up with all this, but they aren't the customers who provide most of the sales.
Edit: And since its all cashless, there will be no armed guards coming around every night to pick up cash, there will be nobody in the accounting offices dealing with receipts and invoices. The list just goes on and on about all the jobs that Amazon is going to make unnecessary.
I don't disagree with any of your concerns. Brave new world is upon us, and I don't think there are any easy answers at the moment, but we're headed in that direction for better, or for worse.
That's what the market is pricing in. Long term, I suspect maybe they are banking on self driving cars to deliver groceries. Groceries can be ordered over the internet, a robot selects the products and puts them into containers. Then an autonomous vehicle (doubt it will be a drone) will deliver it to the customer. However, I don't know why Dollar General or Dollar Tree dropped 3% on this news. I don't see Amazon competing with them yet. Not like Dollar General or Walmart customers will suddenly start shopping at Whole Foods simply because Amazon bought it. We'll see what happens, but I sold put spreads today on both of those names as well as XRT.
There's two memes happening right now: 1. Amazon will kill all retail. In 3 years, everything will be bought online, most of it through Amazon. 2. Everyone will be driving a Tesla in 5 years. These beliefs are starting to be priced in. I see opportunity on the other side.
CVS, Walgreens, or RiteAid.
too funny, but true..thanks for the chuckle
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What a silly series comment. If, as you assert, they had cornered their niche then it means by definition they had reached their terminal growth and didn't have much to grow into. Someone comes along and offers you a 30% premium to buy a company that's already dominated it's niche you'd be a fool not to take that! Money is money, doesn't much matter where it comes from. It may or may not be a good move on Amazon's part, but you just gave the best defense possible on why it is a great deal for WF.
In the end wholefoods has completely sold out for everything they stood for, they lost their niche years ago, ....and I believe that if any other company like Walmart, Kroger's, Costco, target, and any other big box grocery store bought out wholefoods on Friday offering them the same exact premium instead of amazon, every analyst, every CNBC talking head, every news writer and every employee at wholefoods would have deemed the buyout the worst ever....its only because Amazon bought it out that every single fool is cherishing it as the greatest buyout ever..