Where were you the day brick-and-mortar grocery stores died? That’s when Amazon.com Inc. bought Whole Foods.
It’s a trick question: One year after that $13.7 billion deal, the grocery industry is still quite alive. Just this weekend, many of you reading this newsletter probably bought food at Kroger, Publix, or the unquestionably best-named grocery store of all time, Piggly Wiggly.
The deal did temporarily crush grocery-chain stocks. It made everybody worry Amazon would gut Whole Foods’ infamously high prices and squash industry profits. It triggered a frenzy of survivalist deal-making and business-model-rethinking. And yet, at Ground Zero – Whole Foods – not much has changed, writes Sarah Halzack. Prices are still pretty high. Amazon’s presence is barely noticeable. Meanwhile, Piggly Wiggly just turned 102 years old.
And most grocery stocks have bounced back:
Amazon is still huge in the online grocery sector. But that only represents somewhere between one and four percent of total grocery spending in the U.S., depending on who’s measuring. And the Whole Foods deal has only made Amazon’s complex food-selling and -shipping tangle even messier, Sarah, Shira Ovide and Tara Lachapelle note in a Facebook Live discussion. It’s hard to avoid the feeling that Amazon might have – CLUMSY FOOD METAPHOR WARNING – bitten off more than it can chew.
This is Amazon we’re talking about, of course – an $821 billion behemoth that, Sarah, Shira and Tara noted, can afford to fail in ways Kroger can’t. Still, as Sarah suggests, Amazon has given its wiggly prey time to evolve into more-durable forms.