Yesterday, Amazon and Whole Foods made an announcement that's sending shock waves through the grocery industry...and it's a surprise for the rest of us, too. The online retail giant is buying the Texas-based grocery chain for a whopping $13.7 billion, a figure few of us can truly fathom.
Whole Foods has seen a decline in profits for the last few years, as competitors have adopted high-tech innovations to enhance the customer experience, frequently offering lower prices. Whole Foods has a network of more than 460 stores and distribution centers, and that network is about to be swallowed up by Amazon.
The acquisition is expected to provide some benefits to shoppers, lowering prices at Whole Foods stores and likely expanding delivery options. But it's not clear how it will impact the 26 Chicago-area locations.
Understandably, some residents are concerned about whether Amazon's takeover will detract from Whole Foods' ability to cater to local tastes. Sometimes when major chains take over, their various locations start to have a "cookie-cutter" feel, as if they're no longer really aligned with the communities they serve.
The takeover will also pose challenges for other grocery store chains that have already been working feverishly to keep up with new technology and shifts in customer habits and preferences. No rest for the weary.
I'm all about promoting a pro-business environment, creating a climate that fosters healthy competition. But healthy competition isn't just about getting bigger. It acknowledges that small establishments have their place, too. But it seems that the big chains just keep getting bigger, reaching the point where small businesses, even if they sell a great product or provide great service, just can't hold their own.
Amazon has come a long way since its humble beginnings in the garage of CEO Jeff Bezos. It's great that its online presence has flourished, and that it's in a position to expand, but when is enough enough?
When you have more money than you know what to do with, and you're still gobbling up the smaller fry, it might be time to consider slowing down enough to take stock of your situation and be content where you are.
The more a business like Amazon grows, the more it's in a position to extend its presence, making it seem as though continued expansion is the only option. I knew when the company announced plans to open a bookstore in Chicago that they might be taking their efforts to expand a bit over the top. Other book retailers were concerned about how they'd be affected.
I'm not saying you shouldn't try to grow your business, or that you should purposely keep it small just so other businesses don't run the risk of losing to the competition. It's all about why you want to take your enterprise to new heights.
If your goal is to improve the customer experience by providing stellar products and services, and you play by the rules and treat your employees well, then success becomes a natural by-product of your honest, diligent efforts. If you see growth as a way to better meet customers where they are, provide career growth opportunities for your team, and use some of your profits to give back to the community, those are all noble reasons for taking your enterprise to the next level.
If, deep down, though, your motive is greed, a never-ending quest for more, that's not a good reason to try to tip the scales in your favor. If your goal is to buy out all the competition so you don't have to compete, better to quit while you're ahead, because more is never enough.
I have to admit I was a little disappointed when I read about Amazon's announcement. In light of their track record of undervaluing their employees, it was hard for me to be enthusiastic. Two years ago, widespread reports emerged revealing brutal working conditions for Amazon team members-- not just among warehouse employees, but management as well.
Employees cited issues such as "too many big egos" and unrealistic expectations as some of the biggest challenges they faced, sometimes causing leaders to become hostile toward each other and leading many rank-and-file workers to feel overwhelmed.
I hope some serious improvements have been made since then. But it should have happened long before the situation became public. For years, scores of current and former employees had been posting less-than-stellar reviews of workplace culture on sites such as Indeed and Glassdoor.
We'll see what happens. Meanwhile, I hope other grocers who are doing things right can continue to succeed even as the online (and now bricks-and-mortar) behemoth continues to expand.
Filed under: News