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Friday, June 16, 2017

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BREAKING NEWS: Amazon To Buy Whole Foods For $13.7 Billion

Amazon announced this morning that it will acquire Whole Foods for $13.7 billion, in a deal that will dramatically increase the online pioneer's bricks-and-mortar presence while providing some relief for the organic grocer, which has been under pressure from shareholders to improve its performance.

The transaction will be all-cash, the companies said.

According to MarketWatch, "Whole Foods will continue to operate under the Whole Foods angle, and John Mackey will continue as chief executive of Whole Foods with its headquarters remaining in Austin, Tex. Both companies expect the transaction to close during the second half of 2017."

Mackey released a prepared statement that said, "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."

In its coverage, the Washington Post - which is owned by Amazon founder/CEO Jeff Bezos in a personal investment - writes that "Amazon has recently begun experimenting with bookstores and a small grocery, but this is by far its most ambitious move into physical retail.

"In Whole Foods, it is acquiring a company that has recently come under pressure from investors for its lagging performance. Whole Foods whose fleet of stores now numbers more than 430 locations has found it difficult to attract more mainstream consumers as Walmart and other large chains have stepped up their sales of natural and organic products."

“Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,” Bezos said in a prepared statement. "Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades – they’re doing an amazing job and we want that to continue.”

KC's View: Wow. Didn't see this one coming.

(And I'd like to thank both companies for waiting until today to announce this deal. If it had happened yesterday, I would've missed it.)

To be honest, my first reaction was one of skepticism ... mostly because I'm not sure that this a cultural fit, and that Whole Foods' portfolio may be too narrow to make a real difference in Amazon's last-mile plans.

But ... reading the Washington Post story got me thinking about it in a different way. It may be that Bezos sees Whole Foods in the same way that he saw the Post - as an intrinsically viable business model that had not been able to adapt to an environment in which there is greater competition, and may have been unwilling to adapt to a digital economy that created entirely different expectations on the company. The Post suddenly is a vibrant, profitable company (though one must concede that it has been helped by a suddenly news-hungry citizenry ... but it has been well positioned to take advantage of this).

I had a chance to chat briefly with Tom Furphy this morning - the same guy who earlier this week engaged in an "Innovation Conversation" with me here that argued that traditional retailers take way too long to make the kinds of decisions they need to make in order to compete effectively. (You can read it here.) Tom's been making this point about the competitive landscape for years, and he told me this morning that in the long run, "this is a good day for consumers, a good day for Whole Foods shareholders, but a bad day for the big incumbent retailers." The game is changing fast, he said, and traditional grocers simply seem incapable of keeping up.

(By the way...today is Tom's birthday, and this is a kind of birthday present for him, since this deal validates much of what he has been saying about Amazon for years, here and elsewhere. So, Happy Birthday, Tom!)

So what will Amazon do with Whole Foods? Well, to begin with, they're going to find ways to drive margin out of the business by being more efficient in buying, operations, and infrastructure. That is going to make Whole Foods a lot more competitive on price - which is going to have an impact on the likes of Kroger and Albertsons and every traditional grocer that has been able to steal market share from Whole Foods by offering lower-priced organics.

Can you imagine what would happen if Whole Foods announced the day after its deal with Amazon has been completed that every Amazon Prime member gets a five percent discount there? Whole Foods has been slow and clumsy in its ability to take customer data and translate it into meaningful customer communications that can then translate into sales ... but one has to imagine that this is low-hanging (organic) fruit for Amazon. They'll fix that fast.

Subscribe and Save for Whole Foods products? Ordering via the Echo/Alexa system and Dash buttons? One has to imagine that all this stuff is on the table. And there will be no dithering - just incisive analysis and fast execution ... with what at Amazon they call a Bias for Action.

There are other implications. Whole Foods has been one of Instacart's earliest and biggest customers. What happens to that relationship? Does it get replaced by Amazon PrimeNow? I'd think that this is likely ... and that there suddenly is a lot of pressure on the likes of Google and Kroger to consider buying Instacart, just to keep up.

And then, what is the reaction at a company like Publix, which has been expanding its relationship with Instacart? It might not mind a Google connection, but a Kroger tie-in? They'd at least have to think about that ... though it might make sense to start thinking differently about cooperating with the competition in order to more effectively do battle with the Amazon juggernaut.

There may be some Whole Foods customers who will see this as a negative, but no many, I'd guess ... because I betcha that there is a ton of overlap between Amazon Prime members and Whole Foods customers. (Amazon Lockers at Whole Foods stores may be as commonplace as checkout lanes.)

Here's a thought - when will the first Whole Foods store open without checkout lanes, once Amazon gets its Amazon Go technology worked out? I'm just asking...

Like, I said. Wow.

We keep saying it here, over and over. Big, traditional, incumbent retailers have to wake up. "Today is Day One," is the Amazon mantra, and the folks there are moving fast. If you do not have an effective and efficient digital/e-commerce/automation strategy, you are facing nine miles of bad road.

However the markets react to this deal in the short term, keep one thing in mind - Jeff Bezos thinks long-term. In doing this deal, he has crystalized in his mind how Whole Foods fits into the Amazon ecosystem in 2020 and beyond.

The question that traditional retailers in all segment sought to be asking is this:

What will the next deal be?

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From MyWebGrocer...

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From ProLogic Retail Services...



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Friday Morning Eye-Opener: The Last Goodbye

Content Guy's Note: My Dad's funeral was yesterday, and so there will be no MNB today. I should be back in the swing of things on Monday; once again, I appreciate and cherish your patience and support.

However, I don't want you to go away empty-handed ...

One of the things I think my brothers and sisters and I have learned over the past week is while we always knew our Dad touched people's lives, there has been enormous and tangible evidence of this fact in the reactions and responses of people we knew, and many people we didn't. It has been extraordinary.

And so here is the text of the eulogy I delivered at Dad's funeral. Think of it as a Last Goodbye...


One of the realities of having lived a long and full life is that you end up going to a lot of funerals. Dad went to his share over the years, not just as a family member and friend, but also as a lector. And when we'd talk to him about his own eulogy, he'd insist - no longer than two minutes.

Dad wanted it short and sweet. We'll do our best, but two minutes is going to be tough.

In preparing for this moment, we found ourselves returning again and again to how Dad's life was built around love. It is not an accident that his favorite song, and his favorite Scripture passage, was "God Is Love."

There was his great and undying love for our mom, which was like a rock. They were a team, utterly devoted to each other, and that was never more evident when Mom got sick and Dad dedicated pretty much every hour of every day to her. And even when she was sick, Mom was worried about Dad. Their absolute and unwavering love of each other was never flashy or dramatic but always certain and deep. It was a fact of their and our lives.

We never had any doubt of Dad's love of us, even if we didn't always make it easy for him. He taught us math (some of us successfully) and taught us to swim, to ice skate, to ride bikes, to drive. He taught us something about the world outside of Larchmont, New York, when he took us to the South Bronx as part of a community clean-up program.

Most importantly, he taught us how to love, though he did so quietly and through example.

Dad loved to teach and to learn, in equal measure, and possessed what might be called an un-showy intellectual quality. He loved few things more than a good book; he always seemed to have a new one that he was reading and ready to share. The books he loved the most almost always were nonfiction, ranging from biographies to histories to books about religion and faith; while Dad was conservative in his politics he was progressive in his faith, determined to learn and grow even when the path took him to a place that was less than comfortable ... as when he opened his heart and mind to Amy and Suann's committed relationship and marriage even when it ran counter to traditional Catholic doctrine. They loved each other and he loved them both, and so, how could it be wrong? After all, God is love ...

And he was relentless. I sometimes would take him to Mass on Saturday afternoons after he moved into the Osborn's memory unit, and he enjoyed the irony that I - of all people - was the one going to Church with him. We'd sit in the pew, and he'd struggle a bit to follow along, but he'd do his best, and I'd sit next to him and enjoy the moment. Once, though, he nudged me and said, "Y'know, it wouldn't kill you to pray and sing a little bit." Like I said, relentless.

Dad would grab any opportunity to teach a lesson. Once, when Uncle Roland and Aunt Bessie were visiting, Dad was determined to show them these new Corning ware plates that he'd bought, plates that were said to be unbreakable. So, to Aunt Bessie's consternation, he took one out of the cupboard and dropped it on the floor - and it shattered into a thousand tiny pieces. He was perplexed - he'd done this before, and the plate never broke. So what did he do? Well, he grabbed another plate and dropped it ... and this time it didn't break. Lesson learned, and lesson taught.

As principal of Murray Avenue School, he viewed himself as the "principle teacher," and continued to spend as much time in the classroom as his schedule would allow. Among his favorite things to do was to venture out on the playground at lunchtime, and play with the kids - shoot baskets, play kickball and just hang with them. It kept him involved. It kept him connected. It was who he was.

There was the metric system, for which he frequently advocated, both at home and in the public arena, often giving presentations in which he would argue for the US to convert completely to the system used by most of the rest of the world. He loved math, and his passion for the metric system may have been the best reflection of that passion.

Dad believed in continued self-improvement. As a teacher, he was a naturally gifted public speaker ... but he wanted to be better, so he took some Dale Carnegie courses, read some Dale Carnegie books, and continually worked at improving his skills.

Dad loved to drive, and in the years after Mom died, he'd get in the car and drive all over the country, once even tracing the trip to the Pacific Northwest originally taken by Lewis and Clark. He made us a little crazy, because he most definitely did not love cell phones, but he loved the independence and the adventure of it all.

He loved to compete. Dad wasn't showy about it, but he also loved to win. As kids, if we were playing 21 in the driveway, we knew that if Dad got the ball and was at the foul line, the game probably was over, because he'd sink shot after shot. No mercy. If we were going to win, we'd have to earn it.

And it wasn't just Dad. Clare remembers playing Scrabble with both Mom and Dad, and how they'd tell her that she'd never learn if they went easy on her. She still thinks her vocabulary grew because of it.

Once, when Laura and I were invited to play in a bowling tournament with Mom and Dad at the Shore Club, Dad took Laura on his team and lovingly but firmly taught her how to be a better bowler. (They won.)

And even last summer, when he was faltering, Dad played ping-pong at his 90th birthday party and got frustrated when he thought Tim - who just wanted to make sure he didn't fall - was getting in the way of his making a winning shot.

Dad loved the Mets. He loved a good political argument. He loved taking a walk on Greenwich Point. He loved playing tennis. He loved chicken parmesan - Mom's most of all, and then Debbie's, but if he went to an Italian restaurant, that usually was the dish he wanted. He was, in his own quiet way, a passionate man.

This eulogy could go on much longer, but that would annoy Dad, and so we'll close with this...

One of the things Dad loved to do was tell a story. They weren't always true stories - like the tales about how he was in the circus, or how in the Navy he used to be on a submarine that had a screen door. But it seems appropriate here to close with one of his favorite stories.

"I was driving on Mamaroneck Avenue," he'd say, "and I realized that I needed gas. And so I pulled into a gas station, and the attendant (this was way before self-fueling options) was filling another car's tank. But he wasn't paying attention, and pretty soon the tank began to overflow, with gasoline going all over the pavement. At that moment, a stray dog wandered over and began to lap up the gas, and so I went over and tried to shoo the dog away. When I did, the dog took off, running down Mamaroneck Avenue as fast as it could ... until, suddenly, it keeled over. You know why?"

"Why?" we'd ask.

Dad would grin. This was his favorite punchline: "It ran out of gas!"

It occurs to us that while in some ways Dad has run out of gas, his ideas and his enthusiasm and his passion and his beliefs and his love have not ... and his children and grandchildren and great grandchildren - as well as all the friends and students whom he touched deeply over the years - will carry them with us.

Always.


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Stater Bros. Adopts ReposiTrak Food Safety Compliance Management Solution

SALT LAKE CITY - Stater Bros. Markets announced today that it has chosen ReposiTrak, Inc., the leading provider of Compliance Management and Track & Trace solutions for food and dietary supplement safety, to manage regulatory and business documentation compliance within its supply chain.

“Our top priority at Stater Bros. is to provide the safest and highest quality products for our customers,” said Dennis McIntyre, Executive Vice President of Marketing at Stater Bros. “ReposiTrak’s automated system will enable us to better manage our growing list of documents we require from our approved suppliers in order to verify their good business and safety practices.”

ReposiTrak, a wholly owned subsidiary of Park City Group, helps manage regulatory, financial and brand risk associated with issues of safety in the global food, pharma and dietary supply chains. Powered by Park City Group’s technology, the platform consists of two systems: Compliance Management, which not only receives, stores and shares documentation, but also manages compliance through dashboards and alerts for missing or expired documents; and Track & Trace, which quickly identifies product ingredients and their supply chain path in the unfortunate event of a product recall.

For more information about how to join the rapidly expanding community of retailers and suppliers using ReposiTrak's robust safety and compliance solutions, go to ReposiTrak.com.


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"GOOD IS NOT GOOD WHEN BETTER IS EXPECTED"

In this fast-paced, interactive and provocative presentation, MNB's Kevin Coupe challenges audiences to see Main Street through a constantly evolving technological, demographic, competitive and cultural prism.  These issues all combine to create an environment in which traditional thinking, fundamental execution, and just-good-enough strategies and tactics likely will pave a path to irrelevance;  Coupe lays out a road map for the future that focuses on differential advantages and disruptive mindsets, using real-world examples that can be adopted and executed by enterprising and innovative leaders.

"Kevin inspired our management team with his insights about the food industry and his enthusiasm. We've had the best come in to address our group, and Kevin Coupe was rated right up there.  He had our team on the edge of their chairs!" - Stew Leonard, Jr., CEO, Stew Leonard's

Constantly updated to reflect the news stories covered and commented upon daily by MorningNewsBeat, and seasoned with an irreverent sense of humor and disdain for sacred cows honed by Coupe’s 30+ years of writing and reporting about the best in the business, "Good Is Not Good When Better Is Expected" will get your meeting attendees not just thinking, but asking the serious questions about business and consumers that serious times demand.

Want to make your next event unique, engaging, illuminating and entertaining?  Start here: KevinCoupe.com. Or call Kevin at 203-662-0100.

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Editorial continues after a word from our sponsor...

Industry Drumbeat

Good Is Not Good When Better Is Expected

In this fast-paced, interactive and provocative presentation, MNB's Kevin Coupe challenges audiences to see Main Street through a constantly evolving technological, demographic, competitive and cultural prism.  These issues all combine to create an environment in which traditional thinking, fundamental execution, and just-good-enough strategies and tactics likely will pave a path to irrelevance;  Coupe lays out a road map for the future that focuses on differential advantages and disruptive mindsets, using real-world examples that can be adopted and executed by enterprising and innovative leaders.

"Kevin inspired our management team with his insights about the food industry and his enthusiasm. We've had the best come in to address our group, and Kevin Coupe was rated right up there.  He had our team on the edge of their chairs!" - Stew Leonard, Jr., CEO, Stew Leonard's

Constantly updated to reflect the news stories covered and commented upon daily by MorningNewsBeat, and seasoned with an irreverent sense of humor and disdain for sacred cows honed by Coupe’s 30+ years of writing and reporting about the best in the business, "Good Is Not Good When Better Is Expected" will get your meeting attendees not just thinking, but asking the serious questions about business and consumers that serious times demand.

Want to make your next event unique, engaging, illuminating and entertaining?  Start here: KevinCoupe.com. Or call Kevin at 203-662-0100.

Now back to regularly scheduled editorial...

Finally, a word from our sponsor...

Industry Drumbeat

"GOOD IS NOT GOOD WHEN BETTER IS EXPECTED"

In this fast-paced, interactive and provocative presentation, MNB's Kevin Coupe challenges audiences to see Main Street through a constantly evolving technological, demographic, competitive and cultural prism.  These issues all combine to create an environment in which traditional thinking, fundamental execution, and just-good-enough strategies and tactics likely will pave a path to irrelevance;  Coupe lays out a road map for the future that focuses on differential advantages and disruptive mindsets, using real-world examples that can be adopted and executed by enterprising and innovative leaders.

"Kevin inspired our management team with his insights about the food industry and his enthusiasm. We've had the best come in to address our group, and Kevin Coupe was rated right up there.  He had our team on the edge of their chairs!" - Stew Leonard, Jr., CEO, Stew Leonard's

Constantly updated to reflect the news stories covered and commented upon daily by MorningNewsBeat, and seasoned with an irreverent sense of humor and disdain for sacred cows honed by Coupe’s 30+ years of writing and reporting about the best in the business, "Good Is Not Good When Better Is Expected" will get your meeting attendees not just thinking, but asking the serious questions about business and consumers that serious times demand.

Want to make your next event unique, engaging, illuminating and entertaining?  Start here: KevinCoupe.com. Or call Kevin at 203-662-0100.

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