Jeff Bezos Whole Foods Case Summary

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This week , Jeff Bezos, CEO of Amazon, purchased high-end grocer Whole Foods Market causing a painful stock devaluation amongst other retail grocers, according to Michael Hilzick, LA Times staff writer. While Bezos paid top dollar for the company, and improved Amazons stock price; other grocery sellers watched stock values plunge as much as 9% , as was the case for Walmart. Most confusing to stock watchers is what Amazon hopes to gain with the purchase: consumer data, distribution centers, retail store fronts, or on-line grocery market share? The purchase of Whole Foods gives Amazon access to more than 400 high-end store fronts and strategically located distribution centers around the world. Furthermore, it would give the net giant a front…show more content…
Moreover, Bezos could re-train shoppers to buy produce and meats in person, while purchasing everything else on line. Furthermore, Amazon has a subscription service that is already selling this way, making it easy to see how gains in non-perishable sales could mirror the market gains that Amazon realized in the book trade (41% today according to LA Times). Yet another hypothesis, is that Bezos may simply be looking for consumer data. For example, grocers collect very sensitive data on their customers, in the same manner that Amazon does, combining this information would give the on-line retailer a powerful weapon with which to beat competitors. Privacy then becomes a major concern, with the possibility that data gleaned from consumers ' Amazon accounts would be shared with Whole Foods and visa versa. According to Hiltzick, Bezos also is calling for law makers to establish clear rules on the sharing of this type of consumer information. Whether the on-line behemoth plans to compete for market share with the old guard grocers, or leverage the deal in other ways is still an open query. Strangely enough, the thing that captures the imagination most is what Bezos will do next? Expect the

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