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Commentary: The Death of the Grocery Store

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The way most Americans buy food has changed dramatically over the past 50 years. From the small independent IGA and A&P stores to the mega-chains and food warehouses like Kroger and Wal-Mart, the price, service, and selection of our food has undergone significant changes.  This revolution in retailing is about to take a major leap with the purchase of Whole Foods by Amazon. These changes will impact the kind of food offered to consumers and, thus, impact the kind of food being required of those who produce it.

Whole Foods was founded in Austin, Texas when four local businesspeople decided the natural foods industry was ready for a supermarket format.  The original Whole Foods Market opened in 1980 with a staff of only 19 people. It was an immediate success. At the time, there were less than half a dozen natural food supermarkets in the United States.  Beginning in 1984, Whole Foods began acquiring other natural food stores around the nation until it became the major player in the natural foods industry. Last week Amazon, the internet e-commerce behemoth, announced they had bought Whole Foods.

According to Richard Feinberg, consumer science expert at Purdue, “This is a game changer.”  He told me Amazon has a goal of being the biggest food retailer in the world. They plan to accomplish this not by buying or building grocery stores on every corner, but by eliminating the retail store altogether.  “Whole Foods currently has 430 stores, but, after the acquisition, they will have 350 million stores because they will be on every desktop,” Feinberg says. This will allow Whole Foods to present their menu of organic, antibiotic free, non-GMO, and free-range products to a much bigger market. With Amazon’s delivery system, these items can be delivered to your door in a matter of hours.   These types of food items may also become more affordable. Amazon has indicated they intend to modify Whole Food’s pricey image.

This is just the beginning, as other major food retailers react. “Grocery chains like Kroger, Target, and Wal-Mart are not ready for what Amazon brings to the table with the new and improved Whole Foods,” according to Feinberg. Amazon is also very good at data mining, as anyone who is an Amazon Prime member will know. They know what you like, where you shop, and can offer you just what you’re thinking about before you even realize you are thinking about it.  With their new voice-activated, virtual assistant, you can simply say “Alexa order me a pizza” and one will be delivered. That technology is available today; just think of where we will be in 5 or 10 years.  Feinberg believes that soon you will simply submit your grocery list to an on-line service and within a matter of hours a drone or self-driving car will deliver the items to your home or office.

For those of you who want to shop in person for food, Amazon has a plan for you.  Feinberg says that Amazon has a test store called Amazon Go in Seattle that is displaying how Amazon does groceries.  Customers swipe their Amazon Prime Card when they enter. When they take something off the shelf and put it in their cart, it registers in their account. If they put the item back, it takes it off their account. When they walk out of the store, the payment is instantaneous. No more waiting to check out, which is the biggest complaint that consumers have of grocery stores.

Juxtapose all this against the mega-mergers taking place in agribusinesses which will bring more biotechnology to food production, along with decreasing resources like land and water, increasing world demand for high-quality food, and mounting debt for the average farmer.  One thing is for sure, the way we grow, distribute, and buy food will be radically different in the next few years.

By Gary Truitt