Amazon, Whole Foods, and wine prices

amazon whole foodsDon’t expect the Amazon-Whole Foods deal to change wine prices for the better at the upscale grocer

Know one thing first – no matter how much wailing, gnashing of teeth, and rending of garments we’ve seen in the cyber-ether, Amazon’s purchase of Whole Foods will mean almost nothing for wine prices or the wine business.

There are a variety of reasons for this, but the three most important are:

• Amazon bought Whole Foods for reasons that still puzzle people who understand grocery stores. Whole Foods has about 440 stores in the U.S., hardly enough to matter against Walmart’s 4,200 or Kroger’s 2,800. The best guess why the deal happened? Whole Foods’ 400-some warehouses, about four times a many as Amazon has.

• Whole Foods is not a wine retailer; it’s a grocery store that sells wine, and does so at higher markups than most retailers because it’s an expensive grocery store. The days are long gone when I went to Whole Foods to find a deal. This is the store that sells the $5 Rene Barbier for 40 percent more than most Dallas retailers.

• Our old pal three-tier, which restricts how Amazon can sell wine through Whole Foods. Again, the couple of high-profile Amazon wine projects that got so much attention recently weren’t about Amazon selling wine, but about Amazon listing the wine for sale and then sending you to another website to make the purchase.

In fact, my most recent visit to Whole Foods reminded me why the chain was in such trouble before the Amazon sale. It’s still pricey, despite all the cost-cutting publicity; $2 for a container of yogurt is three times the usual grocery store price. And a Gascon white wine I bought elsewhere for $10 was $13. In this, it reminded me of the Neiman Marcus department store chain, whose customers aren’t supposed to care about price, either. And Neiman’s is in trouble, too.