Amazon expects to slash jobs and other costs at Whole Foods, “a person with knowledge of the company’s grocery plans” told Bloomberg. The ink isn’t even dry on the proposed deal, but synergies and efficiencies are already being trotted out.
Amazon agreed to acquire Whole Foods for $13.7 billion, a 27% premium over the stock price on Thursday at close, and now intends to push down prices to slough off Whole Food’s nickname “Whole Paycheck,” and go after Wal-Mart Stores, Target, the German discounters Aldi and Lidl that are expanding in the US, Costco, and grocery store chains, such as Kroger and the private-equity owned chains Safeway and Albertson’s.
The jobs to be cut include cashiers, who’d be replaced by Amazon’s own “Just Walk Out Technology,” now being tested at its Amazon Go convenience store in Seattle. When customers with the Amazon Go app on their smartphones walk into the store, the system logs them into the store’s network and establishes the connection to their Amazon account.
The system uses “computer vision, sensor fusion, and deep learning,” Amazon says, to track everything customers pull off the shelf. If customers put an item back, the system removes it from the virtual cart in their app. When done, customers can just walk out without having to go through a check-out line. The system will automatically charge the customer’s account and send out a receipt.
This system would replace the cashiers at Whole Foods, “according to the person familiar with the matter, who asked not to be named because the plans are private,” Bloomberg reported.
So not the cumbersome self-check-out machines we’ve been grappling with for years, but something that would allow Amazon to differentiate itself. However, the main advantage would be a radical reduction in labor costs at Whole Foods stores. The “employees remaining would help improve the shopping experience, the person said,” according to Bloomberg.
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