AMZN buying WFM

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Depends on the barriers to entry, and the willingness of the existing trust to endure short term losses to crush the upstart.

Look at liquor stores - protected govt oligolopy (you cannot open a new store if the town is at its license limit). No upstart is going to rock the boat

This. There are plenty of examples of government requirements preventing fair competition, which in turn prevents the little guy from getting in on the action. Look at the story recently of the kid mowing lawns who got shut down by his town because he needed a business license. Over-regulation prevents new competitors from coming to the market.
 
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Liquor licenses are .gov strong arming. I think trusts aren't a problem if 1. Government doesn't strong arm. 2. Government prevents private violence

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If we had a truly free market, then no problem, but we don't. We have government regulation in virtually every facet of society that weakens the ability of outsiders to break up monopolies and trusts.
 

mibro

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Anti-trust is ridiculous to begin with.

Consumer demand will control price, regardless of efforts to do the opposite in an unregulated market.

Every single time the government has prosecuted someone under this guise, prices of those products have RISEN. Anti-trust was created to allow politicians and lawyers the ability to destroy people they didn't like and give market share to people they did.

Go back and look at Standard Oil and what energy prices were before and after. Look at the Bell breakup.

Larger companies will always provide the cheapest services. That is how economies of scale work.

The only monopolies that exist today, do so because of laws protecting them. Not because "the market allows it". Healthcare, Education, electricity, etc...

I disagree. I lived through the AT&T breakup and the cost of making phone calls plummeted. You'd still be renting a green rotary dial phone without that anti-trust action.

Economies of scale follow a u-shaped curve with a sweet spot of maximum competitiveness right in the middle. This should be intuitively obvious as one company dominating an entire market with barriers to entry for other players can charge whatever it wants for its product. Think Obamacare.
 

UNSUB

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My guess is they will use WF for distribution of food under their pantry. Which is smart.

As for WF being more expensive, yes it is. But the fresh food is far better quality than anything else you'll find around. Ever seen the size of the wild scallops you can buy at WFs?
Costco's are bigger

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xtry51

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I disagree. I lived through the AT&T breakup and the cost of making phone calls plummeted. You'd still be renting a green rotary dial phone without that anti-trust action.

Economies of scale follow a u-shaped curve with a sweet spot of maximum competitiveness right in the middle. This should be intuitively obvious as one company dominating an entire market with barriers to entry for other players can charge whatever it wants for its product. Think Obamacare.

You're wrong. Becauae AT&T only acheived that monopoly through government law. If government had never gotten involved in "regulation" or creating the disaster that is public utilities, that pricing structure never would have survived.

Nearly every monopoly you see is caused by entry barriers that are government created, not opportunity limited.

That's the giant joke if the whole situation. Government creates law that guarantees monopoly, then reserves the right to break it up. See any conflict of interest there?
 

hillman

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In some markets, Amazon has started using it's own drivers to deliver it's products. Since people take this to mean they would eventually like to phase out USPS, FedEx, ups, etc. But with what I. See at the post office on "Amazon Sundays" the package sizes just keep growing and growing. Paper towels, dog food, and lately Prime Pantry boxes literally takes up an entire LLV.

Last year at this time 120 packages on a Sunday wouldn't come close to filling a mail truck. Last Sunday I could only fit 64 in the truck, I had to make three trips.

Pantry boxes are big. And the fresh stuff requires special handling. Amazon is growing it's delivery sizes faster than we can adapt. I can't imagine what adding WF is going to do.
 
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"By Douglas Rushkoff

"This story reflects the views of this author, but not necessarily the editorial position of Fast Company.

“Amazon just bought Whole Foods,” my friend texted me seconds after the announcement of the proposed acquisition. “It’s over. The world.”

This unease is widespread, and has raised new calls for breaking up Jeff Bezos’s impending monopoly by force. Surely the company, which now generates 30% of all online and offline retail sales growth in the United States, and already controls 40% of internet cloud services, has reached too far. The 3% hike in Amazon’s share price since the announcement—which would alone more than pay for the acquisition—may attest less to the deal’s appropriateness than to investors’ growing fear that missing out on Amazon means missing out on the future of the economy."
https://www.fastcompany.com/40432885/its-time-to-break-up-amazon
 

CoastieRon

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In some markets, Amazon has started using it's own drivers to deliver it's products. Since people take this to mean they would eventually like to phase out USPS, FedEx, ups, etc. But with what I. See at the post office on "Amazon Sundays" the package sizes just keep growing and growing. Paper towels, dog food, and lately Prime Pantry boxes literally takes up an entire LLV.

Last year at this time 120 packages on a Sunday wouldn't come close to filling a mail truck. Last Sunday I could only fit 64 in the truck, I had to make three trips.

Pantry boxes are big. And the fresh stuff requires special handling. Amazon is growing it's delivery sizes faster than we can adapt. I can't imagine what adding WF is going to do.

Along with this, AMZN started putting an "UBER" style infrastructure in place for home delivery. You can download the app now. The commercial has been on a few local stations so far, and I have randomly met more than one person who has downloaded the app.

AMZN has warehouses in multiple locations, including Nashua, NH, and now with an Uber style infrastructure getting ramped up for home delivery, getting home delivery from the local Whole Foods is going to fall in line.

We sold all of our holdings in Whole Foods yesterday, for a dollar over offer price. We were in at $7 a share for about a thousand shares across a couple of accounts for the kids & wife. I wish I had followed suit in my own portfolio, but I had other things on my plate....
 
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Anyone using Prime Fresh yet?

Girlfriend tried shopping with it twice I believe. A lot of the produce we got didn't last two days, the prices on non-perishables was comparable to the Star Market up the street. But what's the point of ordering "Fresh" if it goes bad in two days? We were literally throwing money into the trash.
 

SKumar

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Anyone using Prime Fresh yet?
My sister lives in Hollywood Hills (yeah she's loaded). For the amount of time and effort it takes to drive down the twisty hills, through LA traffic, and then pay overpriced grocery prices, she just pays amazon $300 annually and gets what she wants delivered to her front door. When I did the delivery math based on her order frequency, it came to like $5 each time. So I guess if you're in a situation where you're far from the grocery store, the convenience factor pays for itself (I'm sure the drivers hate driving up that damn hill lol).
 

Dennis in MA

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Judging from the quality of packaging and the thugs I see dropping off my packages, I am very hesitant to trust an Amazon employee to pick out my meat and produce.

Amazon delivers stuff to you?? Not UPS/USPS/FedEx?

Must be nice to live in the big city. LOL
 

richc

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I agree with the comments about wanting to pick out your own fresh foods.

Yeah, I'm picky. I have a good idea of what constitutes an above average piece of beef. I prefer to pick my own produce.

Visiting the Costco meat section is a religious experience for me!

:)
 
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I haven't tried it yet but I would like to at least once. We get delivery to the house so I figure it's worth the experience. Sonofaguns experience sounds like what I expect to happen though
 
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Amazon delivers stuff to you?? Not UPS/USPS/FedEx?

Must be nice to live in the big city. LOL

I don't live in the city, but yes, Amazon marked white vans deliver to me. The drivers park in the middle of the street and chuck packages in the general direction of the front door. By the looks of some of them I wonder if Amazon gets tax credits for hiring from prisoner release programs.
 
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