Amazon and Whole Foods–Good or Bad?

By all accounts Amazon’s purchase of Whole Foods, if it indeed goes through, is a very big deal. No one denies it will have many consequences, whether those consequences are good or bad. What will precisely be the nature of those consequences, though, is not so agreed upon. Of course it may depend on how far into the future one looks. In the near term it is said it will change the food industry, the habits of customers for whom ordering on line may well be easier, the delivery of goods, the nature of retail, the competition to be the largest retailer and for what’s would be left of the retail industry. Amazon which went public in 1997 was then worth $438million with a  stock price of $18,  is now a $475 Billion concern with a stock price of around $1000. And too Jeff Bezos is about to be the wealthiest person in the world with a personal fortune of $80 billion. It’s expected that a company that size would create ripples when it makes a purchase of $134.7 billion. What this means for the long term however is not quite clear. Will it be good for the consumers or bad, good for the economy or not so good? Agreement on the impact diverges. An article in Wired by Zachary Karabel concludes, “If the company can succeed at the grandest level, it will result in better food for everyone—but it may take an unsavory path to achieving that goal. Amazon’s drive is as fraught with risk as it ever was, but looking a decade ahead, the result is likely to be enhanced quality of life for more people than ever before, even as the changes continue to be unsettling and tumultuous.” On the other hand, investment banker Lloyd Grieff in a Los Angeles Times article concludes that, “Amazon is an octopus and it has its tentacles everywhere. Once it’s completed its mission, then you’re going to have the price inflexibility that’s not in the consumers’ interest.” Amazon already dominates e commerce and has ventured into just about every product type available on the market place.  As Amazon affects more and more of the economy as it attempts to dominate more and more of the retail aspects of consumers’ lives, as it burrows further and deeper into our habits and pocketbooks, we need to ask how long their prices will remain to our advantage.   Just as important we also need to examine how in the long run Amazon is setting up monopoly conditions which are anything but good for consumers.