Yes, Amazon’s recent $13.7 billion purchase
of Whole Foods Market will hurt its competitors. But it will help consumers. And that’s the way it should be in a free-market system: Innovators profit, competitors adapt or crumple, and the public reaps the reward — superior selection, lower prices, and better service and convenience.
Critics warn, though, of anticompetitive and predatory behavior. Amazon’s strengths come, however, not from any monopolistic power, but from its ability to satisfy Americans’ insatiable desire for instant gratification: One-stop shopping, quick delivery and competitive prices.
Even then, the impact of the online giant’s entry into the grocery segment is being overblown — both by critics and champions of the buyout. While the purchase of Whole Foods catapults Amazon into the grocery sector, consumers will always need to walk the aisles. These same limitations —the consumer’s need for right-now (and not next-day) and a desire to personally pick perishables — will limit the magnitude of the impact on competing grocery chains. This reality hit investors the day after Amazon’s announcement, as seen by the quick rebound of stocks, such as Kroger’s.
Walmart will also provide a check on Amazon’s anticipated dominance in the grocery segment. Building on its own distribution network and sizable staff, Walmart is experimenting with a voluntary program in which employees deliver online purchases on their commutes home. Walmart’s prototype not only offers same-day delivery in the rural areas neglected by Amazon, but also provides a better model for transporting perishable or fragile food items. If successful and expanded nationwide, Amazon will be forced to compete more on price to match Walmart’s discounts. And consumers will once again reap the savings — all from the comfort of their couches. Margot Cleveland Dearborn, Mich.