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Comment by loudin | Hacker News Reader

I think this is a different beast. I personally loved shopping at Whole Foods because the food is high quality and their employees are treated well. These tenets are totally incompatible with Amazon's culture. Sure, now they say they will run it independently, but if Amazon were to struggle with Whole Foods, the first thing they do will be to lower labor costs and food costs.

Unions to protect workers are now more important than ever in this new age of monopolies.

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Or, Amazon + Whole Foods can afford to run less profitably than Whole Foods alone... in WF's core in-store grocery business.

Because Amazon can better monetize WF: backing with Amazon's logistics chain, expanding grocery delivery, cross-marketing with customer's existing Amazon purchases, and using WF's real estate for warehousing stock closer to affluent customers for one hour deliveries.

I absolutely agree they'll be tempted to squeeze costs, but I think there's a viable financial option to run WF as-is and still accrue benefits to the greater-Amazon.

Amazon is a tech and logistics company. I doubt very much that their strategy is "buy random company, lower pay of employees, profit". This was a very strategic move for them and I am sure they intend to use their tech and distribution platform to increase the profit, rather than slice and dice the store experience and quality at the local level. This is what differentiated WF from many other grocery stores that I'm sure Amazon could have bid on, why would they want to ruin the one thing it had going for it?

" Online delivery of groceries so far has been tough for any company to pull off because of customers' concerns about the quality of meat and produce, Wedbush Securities analyst Michael Pachter said. But if customers know that what they are getting is the same as what they'd get at the local store, they are more likely to try it out.

Pure speculation but I'm guessing their strategy here has a few elements: - they need to get to meaningful scale on the buy side of the grocery business which they weren't able to do on their own - Whole Foods is already a "tech friendly" grocery brand (Instacart, Apple Pay) - Whole Foods has a lot of premium/value add and non-grocery products (prepared food and organic underpants and such) that offer more profit margin than just groceries

It probably also doesn't hurt that Whole Foods is the only grocery store within walking distance of Amazon HQ and about 1000 employees eat lunch there every day.

Interesting

And what would Whole Foods do if things were turning bad? IMO the exact same thing.

> Amazon were to struggle with Whole Foods, the first thing they do will be to lower labor costs and food costs.

They'd do what any company that doesn't want to end up bankrupt to do. Attack the easy parts first (overly expensive infrastructure, etc) then hit the two major cost centers: labor and food costs.

If it comes down to two options: lower wages/quality of food or a company that no longer exists, the former is probably the better alternative, no?

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