Good morning. Aaron in for Adam today.
From a peak of over $65 a share back in the fall of 2013, Whole Foods Market’s stock went on a long, bumpy slide for the next few years. Before Jeff Bezos came along in June, the stock was languishing in the $30s, analysts were questioning the company’s ability to compete and an activist hedge fund was prodding for a shake up from CEO and co-founder John Mackey.
“Competition has caught up to Whole Foods,” the Wall Street Journal observed in a lengthy April 12 feature. “And Mr. Mackey is being forced to try conventional grocery-store pricing and other supermarket tactics to reverse his company’s flagging fortunes.”
Then came Jeff.
Amazon’s $42 a share takeover, now completed, was a boon for recent investors but a loss for longer-term shareholders.
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Now its feels like Whole Foods’ history of struggling and failing is being erased, with breathless depictions of the much-needed price cutting that took effect on Monday. “Amazon Doesn’t Need to Make Money on Groceries,” the Journal wrote. “Amazon slashes prices at Whole Foods to kill off Walmart and Kroger,” tech news site the Next Web offered.
But a quick visit to the local Whole Foods showed those takes are probably way off-base. Yes, there are signs around the store about Amazon-mandated price cuts on items like organic avocados and peanut butter. But I’d estimate something like 99.9% of the prices on items remain the same as they were on Sunday. The fancy sourdough bread we like was still $6 a loaf, a big bag of Kettle Krinkle Cut chips remained $5.39 and, dare I admit it, our new puppy’s favorite all-natural dog treats were still $11.99 a bag.
Less some brilliant, Amazon-only retailing strategy, the move is a staple of the grocery business. Suburban supermarkets practically invented the loss leader as a tactic to bring in more shoppers who would then fill their carts mostly with full priced items. It’s a smart strategy that still works–and exactly the kind of “conventional grocery-store pricing and other supermarket tactics” that Mackey failed to appreciate.
Three Apples a day. Lots of Apple news today. First up, new iPhones and other gadgets are expected to be announced on September 12, the Wall Street Journal reports. Then, Apple CEO Tim Cook is on a bit of a national tour that includes visiting factories to promote manufacturing, schools to promote education, and a journalist or two to tell his story. Government isn’t working as well as it once did so “it does fall, I think, not just on business but on all other areas of society to step up,” he tells New York Times columnist Andrew Ross Sorkin. One way Apple (and other tech companies like Amazon) are stepping up? They’re collecting donations for victims of Hurricane Harvey, a worthy cause amidst the devastation.
Stop following me. Not all the fixes at Uber need to wait for new CEO Dara Khosrowshahi to take over. The company is eliminating a feature from its app that tracked customers for five minutes after they finished an Uber ride, a creepy data collection practice that privacy advocates hated.
Moving upmarket. Struggling wearables maker Fitbit released its first true smartwatch, impressing investors a little bit. Dubbed the Ionic, the $300 wearable is a top notch waterproof fitness tracker with built in GPS tracking, mobile payments and the ability to run third party apps. But the watch’s sci-fi looks drew some criticism. Gizmodo called the chunky, square-screened Ionic “profoundly ugly.” Fitbit shares gained 4% on Monday, leaving them down only 60% over the past year.
Don’t say you weren’t warned. The much-hyped startup fundraising technique of issuing digital currency comes with significant risk of being scammed, Bloomberg reports. One in 10 investors in so-called initial coin offering has been a victim of theft, to the tune of a total of $225 million.
FOOD FOR THOUGHT
Child number three in the Pressman household needed a new laptop for eighth grade and, when he got to the local Apple store, he made a surprise decision to opt for a model of the required MacBook Pro without the fancy new touch bar. He may be a trendsetter. Longtime Silicon Valley (and Apple) veteran Chuq Von Rospach had been using a MacBook Pro with the touchscreen bit instead of function keys since last year but he recently switched back to using an iMac with a traditional keyboard.
“I was curious how I’d feel losing access to those features,” Von Rospach wrote about the experience on his blog. “The short answer: I didn’t miss the Touch Bar at all, and I missed the touchID sensor a little bit, but a lot less than I expected to.”
Without some major improvements, or maybe the discovery of a new “killer app,” the touch bar may fade away in future models, he predicts.
IN CASE YOU MISSED IT
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Sony Is Cutting the Price of This Hot Tech Product by Jonathan Vanian
What Minecraft and Dell Have to Do With Microsoft’s Virtual Reality Push by Jonathan Vanian
Tesla CEO Elon Musk Gives Us a Peek At His L.A. Tunnel Project by Kirsten Korosec
These Shark-Detecting Drones Are Keeping Australian Beaches Safe by Don Reisinger
This Is the New Uber CEO’s Track Record on Gender Equality by Valentina Zarya
BEFORE YOU GO
Did you know there is a way of keeping time that ignores how long it takes the earth to circle the sun? Called sidereal time, the measurement calculates the length of a day by comparing the earth’s rotation to the stars. The earth’s motion around the sun distorts the measurement of a day by almost four minutes, it turns out.
If sidereal time is something you care about, the ultra-lux watchmakers at Vacheron Constantin have something for you. Their new “Les Cabinotiers Celestia Astronomical Grand Complication 3600” model keeps track of moon phases, sunsets, and a bunch of other astronomical measures, including sidereal time.