Ben Thompson on Amazon and Whole Foods

Great piece by Ben Thompson on Amazon’s intended acquisition of Whole Foods:

As Mackey surely understood, this meant that AmazonFresh was at a cost disadvantage to physical grocers as well: in order to be competitive AmazonFresh needed to stock a lot of perishable items; however, as long as AmazonFresh was not operating at meaningful scale a huge number of those perishable items would spoil. And, given the inherent local nature of groceries, scale needed to be achieved not on a national basis but a city one.

Groceries are a fundamentally different problem that need a fundamentally different solution; what is so brilliant about this deal, though, is that it solves the problem in a fundamentally Amazonian way.

★ Monday, 19 June 2017