Whole Foods Expansion

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Alpha8472
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Whole Foods Expansion

Post by Alpha8472 »

Amazon is a huge company with tons of money and they are now saying that they going expand Whole Foods. They are looking into expanding into suburban areas and are going to opening bigger stores.

Amazon is breaking up with the Instacart grocery delivery service. Whole Foods stores will be used for Amazon delivery and pickup for online orders.

Whole Foods stores are also a place where Amazon can sell other products such as Amazon Echo products and other electronics. There is an Amazon Books in my city that sells books and has a Peet's Coffee inside.

The Whole Foods 365 stores are the discount grocery stores. The prices for staples such bread and orange juice are cheaper than Safeway. That is for the store brands. The 365 stores are always busy and are a pleasure to shop in. You can get conventional non-organic foods at great prices in addition to affordable organic and natural products.

The hot deli foods are amazing and affordable at 365. There is also a made to order taco and burrito counter in the back.

Safeway and Albertsons should be in utter fear right now. I drive out of my way to go to the 365 store and save quite a bit of money over Safeway.

There is a market for more standard Whole Foods stores as well. Whole Foods stores are always busy and the parking lots are packed. People are willing to spend their money for high quality food especially in affluent areas.
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Re: Whole Foods Expansion

Post by babs »

Alpha8472 wrote: December 31st, 2018, 4:44 am The Whole Foods 365 stores are the discount grocery stores. The prices for staples such bread and orange juice are cheaper than Safeway. That is for the store brands. The 365 stores are always busy and are a pleasure to shop in. You can get conventional non-organic foods at great prices in addition to affordable organic and natural products.

The hot deli foods are amazing and affordable at 365. There is also a made to order taco and burrito counter in the back.
I've not seen any of this in the 365 stores I've been to. Totally dead, little traffic, prices that are higher than most stores. And let's not mention the so called deli, which is nothing more than a buffet. If you consider that an amazing deli then you haven't been to a real Whole Foods. The 365 format needs a lot of tinkering.
Alpha8472
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Re: Whole Foods Expansion

Post by Alpha8472 »

I have 2 full sized Whole Foods in my city and the area is very affluent.

The selection and pricing must vary between stores. A high volume 365 can afford to have a deli with a bigger selection and better prices.

Then again, it is Northern California where prices here would seem high elsewhere.

Amazon is such a large company that they should be able to lower prices in order to compete with other supermarkets. They should also consider adding conventional brands to 365. Perhaps they could create a third store format that sells the same type of merchandise as Safeway.

Amazon can compete with Safeway and Kroger. They can also add pharmacies and enter the drugstore business.
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Re: Whole Foods Expansion

Post by storewanderer »

Whole Foods seems to have gone downhill under Amazon. The produce looks no different than the produce at any other store but aside from the .49/lb bananas the prices are double other stores in that part of town like Smiths, Sprouts, Trader Joes, Raleys, or WinCo (they are about in line with Safeway pricing... but Safeway is 10 miles away). Whole Foods used to have a lot of different/unique produce and everything they had looked very fresh, much fresher than other stores, but not anymore. Rotation looks like any other store. It isn't bad... it just no longer stands out like it once did.

The bakery, deli, and hot foods areas all look okay as they always have but pricing is so far out of line compared to other stores, and the last few times I bought sourdough bread from the bakery, it seemed like it was a day old; dry and so hard it was tough to chew (store management, which seems to be quite poor, insisted to me that all breads are given away at the end of the night...). The hot foods area hardly has any meat items and at $9 or $10 per pound that is just not a good value. They also keep increasing the prices on the pizza which is pretty okay in quality to begin with but was sure quick and easy to buy; not worth the current 3.99 per slice asking price. I also see a lot of cleanliness issues with these prepared food areas with crusted food on glass, etc. that is not getting cleaned up in a timely manner.

The center store area has outrageous pricing. Whole Foods used to be doing comparison pricing with Trader Joe's in Reno on a number of private label/365 brand items but that has stopped. And the prices are absolutely outrageous throughout their center store. A few dairy items are priced okay. It seems like Amazon has expanded product mix though (shelves are higher than before), especially on water/tea products. Whole Foods also has the largest chip aisle in town next to Safeway but Whole Foods has probably 5x the SKUs (America's Healthiest Grocery Store?).

I question how successful Amazon will be expanding Whole Foods into places like Idaho or southern Utah. Those are what I describe as "cost conscious" regions. There are already multiple operators in those regions who provide solid quality products at fair prices. Whole Foods provides solid quality products at outrageous prices. Bad match.

Maybe there is enough .com demand to make it work.

The South Lake Tahoe Whole Foods will open soon. The parking lot is much too small. It was supposed to be a 365 store but I am not sure if they are going forward with that format there or just making it a standard Whole Foods (probably a better idea). They should probably target Truckee too. Whatever they do in Tahoe, I expect it to be very successful. Safeway's continued poor execution combined with the very large crowds at Tahoe opens the door for more stores; frankly, they have more business than they know how to handle.
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Re: Whole Foods Expansion

Post by pseudo3d »

Alpha8472 wrote: December 31st, 2018, 12:01 pm
Amazon is such a large company that they should be able to lower prices in order to compete with other supermarkets. They should also consider adding conventional brands to 365. Perhaps they could create a third store format that sells the same type of merchandise as Safeway.
I can't see a "third format" working, because not just in the fact that I can't see anyone starting a "traditional supermarket" format anymore, but it would be an incredible cost sink to get a meaningful market share. The closest thing I could see a Prime-integrated Fresh & Easy-style format store, but small format stores (not just Fresh & Easy, but concepts by Safeway, Jewel, and others) when launched a decade ago in the States underperformed at best. Amazon could buy a grocer outright and brute-force markets but they probably have better ideas on spending resources.
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Re: Whole Foods Expansion

Post by mbz321 »

Honestly, I don't think Amazon has a clue what is is doing when it comes to B&M retail. I think the entire Whole Foods buy was a big move that is really going to hurt them in the long term.
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Re: Whole Foods Expansion

Post by pseudo3d »

mbz321 wrote: January 3rd, 2019, 7:59 pm Honestly, I don't think Amazon has a clue what is is doing when it comes to B&M retail. I think the entire Whole Foods buy was a big move that is really going to hurt them in the long term.
Almost every one of Amazon's brick and mortar attempts is very different than Whole Foods--small format, urban-oriented, Amazon-branded, and basically a novelty. But if Whole Foods can't work out, whether or not it dramatically transforms into a new store in Amazon's image or not, they won't let it sink their operation, and they'll offload the chain (or what's left of it) one way or another. In response to my earlier quote about a "third format", Amazon renovating a 365 by Whole Foods into an "Amazon Fresh" supermarket isn't out of the question but a far cry from a "Safeway killer". If they wanted to make a truly meaningful impact on brick and mortar supermarkets to give them national scope, they should just BUY one of the national ones.
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Re: Whole Foods Expansion

Post by babs »

mbz321 wrote: January 3rd, 2019, 7:59 pm Honestly, I don't think Amazon has a clue what is is doing when it comes to B&M retail. I think the entire Whole Foods buy was a big move that is really going to hurt them in the long term.
I would argue that Amazon isn't looking at B&M retail as B&M retail. The purchase of Whole Foods was an opportunity to expand the Amazon Fresh concept nationwide quickly. The stores are nothing more than delivery hubs. Amazon makes lots of mistakes but their successes far out number their failures. Take the long view. In 10 years Whole Foods will be a completely different concept.
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Re: Whole Foods Expansion

Post by pseudo3d »

babs wrote: January 4th, 2019, 8:08 am
mbz321 wrote: January 3rd, 2019, 7:59 pm Honestly, I don't think Amazon has a clue what is is doing when it comes to B&M retail. I think the entire Whole Foods buy was a big move that is really going to hurt them in the long term.
I would argue that Amazon isn't looking at B&M retail as B&M retail. The purchase of Whole Foods was an opportunity to expand the Amazon Fresh concept nationwide quickly. The stores are nothing more than delivery hubs. Amazon makes lots of mistakes but their successes far out number their failures. Take the long view. In 10 years Whole Foods will be a completely different concept.
While there is a lot of product cross-pollination especially on the Amazon Fresh side, Amazon Fresh warehouses already exist independently of Whole Foods, and Amazon Fresh has a selection of "non-whole" foods that WFM wouldn't carry.
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Re: Whole Foods Expansion

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