Amazon-Whole Foods deal overfills the shopping cart
Eat your broccoli. Big brother is watching.
OK, we admit that’s an overreaction, but the concern is real.
Amazon.com announced Friday that it’s buying Whole Foods for $13.7 billion. The transaction sent shock waves through the U.S. grocery trade. While Whole Foods’ stock price shot up 28 percent on Friday, virtually every other grocery stock plunged: Kroger down 12 percent; Wal-Mart down 4.5 percent; Costco and Target both down by 6 percent or more. Stock prices don’t exist for companies Aldi and Giant Eagle, which are privately held. And Amazon’s stock value soared, enough to actually cover the transaction price.
Competitors have good reason to shudder. The retail grocery industry already is a cut-throat game played for razor-thin profit margins. By revolutionizing concepts of market distribution, Amazon is expected to exert even more pressure on conventional grocery chains.
“Once Amazon is a player in the industry, anything can go,” Joe Agnese, a food retailing analyst, told USA Today. “The big threat is what else they can do. Now that they have a retail presence with (more than) 400 stores, long-term they can expand on that threat.”
Founded as an online bookstore in 1994, Amazon is now the world’s fourth most valuable corporation. It surpassed Wal-Mart in 2015 to become the United States’ largest retailer. It has more than 300,000 employees worldwide.
What Amazon also has is an unrivaled ability to gather, process, store and analyze information about us.
Forget about the FBI, CIA and NSA; what information do Amazon, Google and Microsoft have that we voluntarily gave them?
Forget about what the Russians know; what does Amazon CEO Jeff Bezos know about all of us — and our spending habits?
And, how is this information being used to custom-market goods and services to each of us?
In the field of cloud computing, Amazon is considered vastly ahead of its chief competitors Google and Microsoft. “Amazon Web Services is leading the pack among public cloud providers, and by all indications, it’s not even close,” reports Businessinsider.com. “There’s even a chance it’ll become Amazon’s biggest revenue driver within only a few years. But Microsoft and Google are chasing the opportunity with everything they’ve got, throwing money and resources into building out their Microsoft Azure and Google Cloud Platform products and hiring execs to lead them.”
Speaking of data management, it’s a point of contention that Amazon founder Jeff Bezos owns The Washington Post. As a presidential candidate, Donald Trump complained that the Post gave Amazon too much power to sway opinion — and policy — in the company’s favor. Trump went so far as to ban Post reporters from his campaign events.
The Amazon-Whole Foods deal is subject to regulatory review. We suggest that the review is a thorough one.