Amazon and your groceries -- would you choose Amazon, Kroger, Costco, or other?

Appley's picture
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The Amazon-Whole Foods deal came together relatively quickly, according to people familiar with the matter, indicating Amazon may not yet have a fully formed strategy for Whole Foods.

Something as simple as groceries has become something so complex... I certainly wouldn't have imagined the day would come. Admittedly I've never ever tried buying groceries online before and will not really try it (I prefer going to a store), but I know this is definitely a reasonable appeal to others. From initial reactions, it seems like everyone is getting a little wary that Amazon will, again, be a major threat to everyone and their mother's businesses.

That said, now that Amazon has joined the fray in online groceries, where would you buy your groceries from and why?
What kind of business model do you think Amazon will try to play with in order to compete? (More Prime incentivisation or something new?) -- Important question that I think we should keep in mind due to the supply chain and logistics differences between books and gadgets and organic matter. Perhaps this new line of business will not perform as well as thought and eat more into Amazon than originally anticipated.

...And, do you think Amazon is trying to take over the world?

Comments (32)

Jun 19, 2017

I'm less interested in those companies than I am in Aldi and Lidl. Aldi has an established international presence and their main U.S. brand (Trader Joe's) is the only real comp to Whole Foods as far as I am concerned. Lidl is beginning sales in the US just this week. Look at what Aldi and Lidl did to the UK, they may lack American infrastructure and distribution but that is exactly why they are interesting. I don't think they will upend large brands like Walmart but there are many regional chains they could snap up in the coming years. Unlikely we see an unmitigated failure like Target in Canada taking place here in the US all things considered. Whether you believe that or not, do your DD now.

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Jun 19, 2017

I know Lidl is the hot topic lately, but I'm not sold. They're still sourcing most of their infrastructure from Europe and their talk/the rumors have so far surpassed any reality. It's interesting, but will still take some significant movement until I think they'll play any real part in the overall landscape.

I actually think the Aldi brand is more interesting right now than Trader Joes. They are undergoing significant expansions.

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Jun 23, 2017

As someone who has shopped in Aldi a lot here in the states and both Aldi and Lidl back in Europe, I think they are really the most significant competition in the industry as a whole. As an example, Aldi alone has 1,500+ locations in the states compared to Whole Foods' ~440. I think a Aldi and Costco membership combination is the best way to save money probably, other than couponing.

Jun 23, 2017

Just as a small FYI, the Aldi in the U.K. is not the same as the Aldi that operates Trader Joe's in the U.S. The Aldi brothers split Aldi into two: Aldi North and Aldi South. Outside of Germany, only one Aldi operates Aldi stores in a given country. The Aldi stores that you see in the U.S. and U.K. are operated by Aldi South, while Trader Joe's is operated by Aldi North. Aldi South has recently spent several billion dollars to remodel and modernize their stores in the U.S.

Lidl is very similar to Aldi, but unlike Aldi, also offers name-brand products as part of its regular assortment. I feel like Aldi's private label products are the main gripe that people have with the store, so I am very interested to see how Lidl fares in the U.S.

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Jun 23, 2017

The Aldi's I frequent here in the states carry a few name-brand products as well.

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Jun 19, 2017

I walk to/from work and there are like 3-4 grocery stores that I pass by, depending on traffic. So usually I just go to whichever one my path home from work takes me closest to. Now that I think of it, I actually kinda like grocery shopping and just browsing around (definitely not great for the pocketbook though - there's definitely been times where I've intended on buying like a steak and some veggie to grill and come out of there with like $70 of groceries).

I do use Amazon pantry from time to time, but mostly for big box items or stuff that I don't wanna lug home like those packs of gatorades.

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Jun 22, 2017

Trader Joe's and aldi are great. I was never a big fan of Kroger but their delivery is great when you are in an apartment. I never have stepped into a Whole Foods (trader joe's shares the same parking lot). I go to Walmart quite a bit for pick up and go in for quick items.

Jun 22, 2017

I was rather surprised to see Walmart on the list of major grocery sellers to be honest. Maybe the Walmart near my area isn't as tailored for food items? EDIT (somehow forgot to add this sentence): The thought of buying random knick-knacks and food at the same time is weird to me. Idk I never imagined Walmart in that light lol

Then again this is coming from someone who adores Costco sooooo.....

Jun 22, 2017

I have yet to develop the demand for sam's or Costco. I do know that the sam's club liquor store does not require membership!

Jun 23, 2017

You could have one of the newer "Neighborhood" Walmarts or that new line they have very close to college campuses where their offerings are very minimal. Significantly smaller footprint.

Jun 23, 2017

In many rural parts of the country, Walmart is the only game in town as far as groceries are concerned. I think there is a huge market opportunity for other low cost grocers in this area.

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Jun 22, 2017

Amazon and traders joe if they could both deliver to my doorstep.

Jun 22, 2017

Always in stores. Never delivery.

Jun 22, 2017

I definitely agree with this for food items and clothes (usually).

Jun 23, 2017

same, I enjoy grocery shopping and prefer to go the store.

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Jun 23, 2017

I'll never buy groceries online, you're gonna order a head of lettuce and just hope it looks fresh or doesn't have any weird shit going on with it when it shows up at your door? I don't mind going to the store and getting it done as long as you go at the right time when it isn't crowded.

As far as Amazon goes, they will have to put every competitor out of business so that they can raise prices. Amazon doesn't make any money because its prices are too low but they keep taking share because its prices are too low. Eventually one of those dynamics will change. I don't think that it has been making the best moves strategically as of late, getting into low margin businesses like grocery, opening physical book stores, adding more debt, they were able to scale and grow so fast because they didn't do those things.

I'm actually pretty surprised there isn't more talk of anti-trust with Amazon now that its getting into higher profile acquisitions. Especially when something like Staples and Office Depot gets shot down.

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Jun 23, 2017

for produce & spices: ethnic markets & farmers markets, WAY cheaper and better quality.
for meat: if not at ethnic market, go to a butcher, trader joes, or fresh market (worth the extra coin)

however, I absolutely would feel comfortable buying all of my sundries from Amazon. no need to spend $4 on toothpaste at harris teeter and waste my time and gas on a trip for that plus maybe some TP or last minute face thing my wife texts me about as I'm about to check out.

another area that I could see them disrupting if they get away from the legal and regulatory hurdles: alcohol. I would LOVE to get Amazon prime to cater my pregame.

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Jun 22, 2017

Ethnic markets?? Do you mean like Asian Food Market (a literal store chain, which I recommend everyone buy from hehe) or H-Mart? Or do you mean those marketplaces with a bunch of stands set up and crates of produce and meat cuts that producers go to so they can sell stuff?
Cause if the latter, I'm wondering if you live in a city because I stopped seeing those entirely ever since I started living in the US to be honest, lol. I see them on TV but they're super elusive for me and everyone else I've known.

Jun 23, 2017

no not a bazaar like thing, a grocery store that caters to certain ethnic foods

Jun 23, 2017

100% agree on the ethnic markets. "Normal" grocery stores make most of their money from prepared foods, while ethnic grocery stores make most of their money from produce and meats (i.e. food that customers have to cook). This results in higher turnover, lower prices, and frequently fresher food. Asian and Latino grocery stores, at least where I live, are excellent and frequently have an ever bigger selection on meat and fish than even Whole Foods does.

Jun 22, 2017

This greatly explains why prepared food items continuously keep popping up in the Western grocery stores in my area over the years lol. I had no idea they were actually profitable, I always thought it was a cultural trend in the West where everyone just sucks at cooking and/or are lazy or something to that effect (but maybe that's why they make a lot of money from prepared foods?) I definitely agree with the wider selection of meats and fish (produce in general honestly) from Asian supermarkets though.

Could you explain how a higher turnover comes about from ethnic grocery stores selling produce and meats? I'm not following or maybe something went over my head.

Jun 23, 2017

I don't know if my eyes were deceiving me, but last year in Berlin I saw an Amazon delivery guy deliver beer.

Jun 23, 2017

I will always go in store for the majority of items. I like to cook and there I like to go grocery shopping (I know I am weird) to try new recipes etc. Also I struggle to see how Amazon would be able to keep frozen/ refrigerated items from spoiling. Obviously they could ship it in refrigerated packaging but the shipping expense would increase and thus prices.

What I have noticed is buy online and pick up in-store. My local shoprite, foodtown and even walmart offer this. Amazon could do the same with whole foods. Buy it online and pick it up ins-tore.

Jun 23, 2017

re: preserving. Blue Apron and other home delivery services do this already.

my concern is the environmental waste. there's SOOOO much plastic being created/used/wasted as a result of all of this shipping. I'm not a hippie and I'm actually worried.

Jun 23, 2017

My local grocery store is shutting down.

I hate Walmart so, so much, but I think we're gonna have to go there now.

Jun 23, 2017

I briefly used grocery delivery services during my first and only Midwestern winter. The closest actual grocery store was about a mile away and I didn't have a car and Uber wasn't around yet, so having groceries delivered was clearly the better option than lugging around a backpack full of groceries on my bike in -10 degree weather.

I actually found online shopping saved money, as you would never be tempted to buy the promotional items that are placed at the end of the aisles or on the checkout counter. Being forced to wait on delivery made you more thoughtful about what you buy, and you never forget that you already have milk in the fridge because you can check for what you currently have as you order.

I think Amazon could make big waves in the pre-portioned meal service with this acquisition. I've been waiting for an actual grocery distributor to create something along the lines of BlueApron or HelloFresh. I'd love to log onto my Amazon account to order a modular weekly menu of supplies for 1-3 meals per day, adjusting portions for my needs in a way that also minimizes material / product waste. Amazon has been doing similar optimization work for years so I hope they apply this approach to their new grocery business.

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Jun 23, 2017

your idea is genius. delete your post and PM me, I know a good trademark lawyer

Jun 24, 2017
Appley:

The Amazon-Whole Foods deal came together relatively quickly, according to people familiar with the matter, indicating Amazon may not yet have a fully formed strategy for Whole Foods.

Something as simple as groceries has become something so complex... I certainly wouldn't have imagined the day would come. Admittedly I've never ever tried buying groceries online before and will not really try it (I prefer going to a store), but I know this is definitely a reasonable appeal to others. From initial reactions, it seems like everyone is getting a little wary that Amazon will, again, be a major threat to everyone and their mother's businesses.

That said, now that Amazon has joined the fray in online groceries, where would you buy your groceries from and why?
What kind of business model do you think Amazon will try to play with in order to compete? (More Prime incentivisation or something new?) -- Important question that I think we should keep in mind due to the supply chain and logistics differences between books and gadgets and organic matter. Perhaps this new line of business will not perform as well as thought and eat more into Amazon than originally anticipated.

...And, do you think Amazon is trying to take over the world?

The local farm market is my thing.

Jun 24, 2017

I took a page out of mark zuckerberg's book and grow my own produce/livestock. I am sure to name all of my animals and act like I love them. This allows for better marbling of the meat when I ultimately dispatch them with the utmost savagery.

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