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Tesco Merges Two Customer Services Offices

British grocery chain Tesco is consolidating its Customer Engagement Centers (CEC) into one office located in Dundee. As part of the consolidation, it is closing the CEC in Cardiff by February 2018. The company said it expects the move to simplify customer service while maintaining quality through phone, email, and social media operations. Closing the Cardiff CEC will affect 1,100 workers, but Tesco expects to create 250 new positions at the Dundee office. [ Tesco CEC Dundee, image credit: © Tesco  ]

"Tesco simplifies customer service operations", News release, Tesco, June 21, 2017

Amazon’s Target In Whole Foods Deal Is Ultimately High-Margin CPG

Amazon’s deal with Whole Foods Market certainly threatens low-profit-margin – around two percent annually – retail grocers like Krogers. But Amazon’s real target is not the stores: it’s the profitable products on their shelves. In other words, it’s the higher-profit-margin – 16 percent annually – consumer packaged-goods (CPG) companies that should be worried. Procter & Gamble and Colgate-Palmolive have grabbed large market shares because of an economic and distribution model – economies of scale, lower prices, and acres of store shelf space – that is now breaking down, thanks to Amazon. Its Amazon Basics brand, already gaining market share in diapers and batteries, could be extended to other high margin categories, and move into Whole ...  More

"Amazon's Real Target Isn't Whole Foods. It's Everything You Buy.", Bloomberg, June 20, 2017

Amazon-Whole Foods Merger Shakes And Rattles The Retail Industry

Drug Store News outlined several key points to keep in mind now that Amazon plans to acquire Whole Foods Market. The $13.7 billion acquisition, awaiting approval by regulators and shareholders, will have major repercussions for retailers that sell groceries, beauty products and health products. A few of the key takeaways: both companies benefit from a merger. Amazon extends its beachhead into grocery sales, while Whole Foods gets a rich uncle. The entire retail industry knows now that it’s no longer business as usual: witness the stock slides of Target, Walmart, Kroger, Costco, and Supervalu. The acquisition furthers Amazon’s metamorphosis into a true omnichannel business, thanks to the addition of 460 brick-and-mortar stores. [ Image ...  More

"Amazon and Whole Foods: 5 things to know about the blockbuster deal", Drug Store News, June 16, 2017

Amazon-Whole Foods Deal Signals A Major Economic Trend

The recently announced acquisition of Whole Foods Market by Amazon is an indicator of a fact well-known by retail analysts: both Amazon and Walmart are trying to be like the other. Amazon is establishing brick-and-mortar bookstores and buying 460 grocery store locations. Walmart, through its recent acquisition of Jet.com and other moves, is strengthening its online presence and infrastructure. But the larger picture is that the retail industry is undergoing consolidation among a few big companies whose resources stretch globally, whose access to sophisticated supply lines, and advanced marketing and delivery technologies, gives them major market advantages over smaller competitors. This consolidation is happening in other industries, ...  More

"The Amazon-Walmart Showdown That Explains the Modern Economy", The New York Times, June 16, 2017

Some Of The Advantages Of The Amazon-Whole Foods Deal

Amazon has been tiptoeing into the huge consumer grocery business since it launched its AmazonFresh home delivery service in 2006. The acquisition of Whole Foods Market, with its 460 physical stores, accelerates the move, and offers benefits to bother companies. It is probable that the deal will mean Whole Foods’ Instacart delivery service will be replaced with an Amazon version that adapts Prime Now and AmazonFresh. As to pricing, Amazon is also likely to use its scale and efficiencies to help relieve pricing pressure on Whole Foods. And Amazon could also use Whole Foods’ partnerships with suppliers to lure them to the Amazon platform and take advantage of Amazon’s 300 million customer accounts. [ Image credit: © Whole Foods Market  ]

"The Implications Amazon’s Acquisition of Whole Foods", Blog entry, Euromonitor International, June 16, 2017

 
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