As last week’s escape of thousands of farmed salmon in WA helps to demonstrate, there may not be any such thing.
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You need the will to prosecute. The current FTC and the DoJ antitrust division lack this will, and most citizens are too driven by short-term advantage to be outraged aout long-term effects of prices that are unsustainably low.
But it won’t work on the national chains or the large regional chains that are where most people shop.
I’m not a big fan of them either.
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By gathering data about your offline behaviour, among other things. Also, supermarkets are already experimenting with flexible prices changing through the day.
I expect this to go hand in hand with “easier” shopping, or a “great shopping experience”. Your phone is likely to become the key to that: shopping list prepared or attended by Echo, Alexa, Siri or whatever, identification in the store for customised special offers, and wireless as well as cashless payment. Advertising and selling/buying will become one seamless thing for both sides.
Seems legit.
Yep. Loblaws does it:
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Does Bob Loblaw own that chain?
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I giggle every time I say the name of that place now. Thanks, Arrested Development!
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It is notoriously difficult to win predatory pricing cases in the US. The Supreme Court set the bar very high in Brooke v B&W (1993). After that, there was one case against American Airlines around 2001, and it failed. The courts have had reason to be skeptical, since it would seem that any vanquished commercial rivals would be replaced before an investment in predatory pricing could be recouped. But, nowadays we have much higher barriers to entry in many markets. It would be a good idea for Congress to revisit the Sherman Act, and address this sort of thing more directly. Come to think of it, it sounds like the perfect fit for the Democrats’ new “Better Deal” agenda. Call your Congress member, everybody!
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I want - nay, I demand - my cupcake-in-a-cup.
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I’m lost on this. Does anyone have an example of them selling something below cost at WF?
Cutting 43% off of something that’s 80% margin isn’t taking a loss, it’s taking a normal margin!
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First, it’s something that people will probably be looking at, beginning today. But with any one example, you may just be looking at a loss leader. That’s different than predatory pricing, and it’s not an illegal anticompetitive practice.
Second, Whole Food’s gross margin last year was only 34%.
Huh. Mid-30’s, eh? For physical goods? Not too bad. I mean, that’s an OK margin for Software. At least from what I hear from the corporate overlords.
If we take one-third to be the amount of the across-the-board price drop, i.e. WF’s entire margin, then Amazon is just following it’s usual course of trying to take over the world by not making any money:
Amazon is like a real-life Pinky and the Brain scheme.
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WF may have better margins than their competitors; I don’t have industry averages in front me. But on a standalone basis, WF’s profit margin, operating margin, EBIT have all trended in the wrong direction the last few years.
But to address your point: WF revenues are up by 11% over the previous three years while gross profit is only up 7%. The cost of goods sold over the same time frame has increased at a greater rate and margins got slimmer even before considering operating expenses, etc. If their COGS continued the upward trend this year, too, cutting prices will eat into WF’s net income even more.
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Yeah a bit like when my wife’s business received advertising for google adwords in a printed letter.
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I don’t think Alphabet owns Amazon, right? But the rest of what you say makes perfect sense.
I apologize. I’m extremely dumb sometimes. Strike my comment.
not my intention; the rest of it sounded right to me!
Wow! Isn’t 10% considered really good in the grocery business?
Now I’m wondering if this Amazon takeover isn’t based in some form of vendetta between competing boards of directors.
I think 20% is average for grocery biz. Amazon’s margins are actually higher, overall. It helps that they sell a lot of services now, too.
