Jun 21, 201705:35 PM
Our weekly blog on the New Orleans fine dining scene
I am not the typical grocery store shopper. I tend to shop more frequently than most people - every other day or so, and often more than once each Saturday and Sunday. On the weekend my multiple trips are usually because I've forgotten something, but for the most part I tend to shop for a meal right before I cook it.
I know that many people do well shopping once a week or so, stocking up on staples and ingredients for meals they plan to cook all week. But while I do have an abundance of pastas, grains, canned tomatoes and beans on hand as a matter of course, I prefer to buy vegetables, fruits, meat, poultry and seafood when I'm going to cook them. In the past, when I tried shopping once for food to cook the whole week, I'd find that by the end of the week, at least some of what I wanted to cook had spoiled or gone at least a little "off."
Additionally, I don't like to lock myself in on Monday to cooking something I might not be in the mood for on Friday. As long as I'm diligent about not picking up "impulse" buys, doing it my way actually saves me money. Sure, I spend more time shopping than most people, but there are a couple of Rouse's and a Whole Foods near my home, and the downtown Rouse's is directly on my route home from the office.
I mention all of this because I spend a good bit of time in groceries, and in the past I've represented such businesses in litigation. I don't profess to be an expert in the economics involved, but I've been interested in how groceries operate, where they locate, and how the products they sell have changed and continue to change over time.
Most of the stories I've read about Amazon's impending purchase of Whole Foods are looking at the deal through one of two filters - technology or competition. Stories of the first sort tend to predict that Amazon is going to eliminate cashiers, or use Whole Foods stores as staging areas for faster delivery of goods to consumers. In the "competition" stories, the gist is usually that Amazon wants to compete with Wal-Mart, and that competition is going to doom smaller grocery chains, whose margins are already pretty thin.
Some of that may be true, though I very much doubt Amazon is going to start using Whole Foods warehouses to stock clothes, electronic equipment, or anything that's not already sold at the markets. Amazon has also said that they do not plan to fire cashiers in order to implement their "Amazon Go" kiosks, though I guess that could change down the road.
I think the deal is definitely about competition, but my guess is that Amazon is less interested in getting into the brick and mortar business than expanding their online sales of groceries and similar products. I should note here that my wife and I do buy some products we'd ordinarily get at a grocery or retailer such as Wal-Mart or Target through Amazon - things like paper towels, toilet paper, canned goods like soup and beans, snacks for our kids and other things that one expects to be 100 percent consistent in quality wherever they're bought.
I might be more likely to buy other products in that manner, if I was buying Whole Foods branded products; I'm talking about things like their 365 brand pastas, dried beans, olive oil, grains and rice.
And that's where I see the real benefit to Amazon - it's the Whole Foods brand. Whether it's entirely accurate or not, I think most consumers shop at Whole Foods because the products there are perceived to be superior to comparable products at other retailers. I certainly like the products I mentioned above, and find Whole Foods' seafood, meat and poultry to be generally excellent, if also expensive. I don't see an appreciable difference between the quality of the vegetables and fruits between Whole Foods and Rouse's, and for a number of reasons I shop at Rouse's more often than Whole Foods, but I bet I'm not alone in, generally, trusting that if Whole Foods puts its name on a product, it's going to be pretty good.
So if you're Amazon, and you want to expand your sales of all sorts of grocery items, one way to do it would be to sell stuff that carries the Whole Foods imprimatur.
As for me, I'm going to continue shopping regularly at grocery stores, because I need to actually inspect the vast majority of what I want to buy. I pick up fruit and vegetables to make sure they're as ripe as I want them; I look at the marbling on beef, pork and lamb, and, again, I want to buy those things just before I cook them.
Does this mean my spending at brick and mortar shops will drop overall if Amazon can promise to get me dry goods within one or two days of placing the order? Maybe. If that's the overall trend in the marketplace, we may see the retail area of the stores shrink somewhat, but I doubt most people are willing to order, avacados, let's say, and trust that when they arrive they'll be precisely as soft as desired, or that lemons won't be too hard to juice, or that any of the innumerable things we check when we physically interact with ingredients will be the way we want before we head to the kitchen.
One of the last stories I read said that "Wall Street" had actually started pricing Whole Foods stock above the $42/share Amazon is offering, leading some to speculate there may be competing bids from other retailers. Maybe so; all I know is no matter how efficient and cheap Amazon makes the process, I'm still going to shop at Rouse's, Langenstein's, Dorignac's and Whole Foods from time to time. It's just how I'm built, I guess.
I'd be interested in your thoughts on shopping generally; how often to you do it? Where? What is the primary thing you're looking for?