Amazon’s purchase of Whole Foods is described as the deal of the century.
“ ‘This is an earthquake rattling through the grocery sector,’ said one expert of the Amazon-Whole Foods mega-deal. Experts expect Amazon will bring its low-price expertise and technology prowess to bear with Whole Foods, putting further downward pressure on prices in the already hyper-competitive, $611-billion U.S. grocery industry.
“The grocery business, notorious for its low-profit margins, is known in the logistics industry as the ‘last mile’ for e-commerce. Will the Amazon-Whole Foods deal change all that? Will Amazon change Whole Foods or will Whole Foods change Amazon?” asks LA Times reporters James F. Peltz and Makeda Easter.
Is Amazon on the verge of owning American retailing?
“The deal shakes up a U.S. grocery industry that has been struggling to keep up with growing competition, both in stores and online. Amazon, which for years has been testing new technology and innovations in quiet corners, would now have a network of physical locations to test and implement those ideas,” according to the Washington Post.
Which leads to the question: will robotics and automation displace workers in the retail grocery industry as it is continuing to do in the retail industry?
Yes, it will. There is no question about it.
Amazon Robotics describes its mission, and a business model it surely will adhere to:
Amazon has begun its takeover of the supermarket industry. Two big announcements have sent the shares of other grocery chains into a $12 billion slide.
1) Amazon will cut prices on some Whole Foods goods. This is nothing new. The tech giant routinely cuts prices on popular items to make it appears as though they offer lower prices across the board.
2) Amazon Prime customers will have special access to Whole Foods deals. This is the announcement to watch.
60 million people are Prime subscribers. This massive network will allow them to blow their competitors out of the water. Within 10 years they'll all be gone, expect maybe Wal-Mart, who has recently partnered with Google to challenge Amazon for control of the market.
Amazon's dominance will hurt consumers. Incredible market power will allow the company to raise prices and squash any potential newcomers. Their dominance will also give them increased power over the political system. We see similar mergers by other tech giants. They could very well gain an unprecedented grip over our economy and politics, unless we rein them in.
By Shira Ovide, Sarah Halzack
