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Mark Ordan Sold His Business To Whole Foods In 1996; Here's What He Thinks Of The Amazon Merger

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Mark Ordan Sold His Business To Whole Foods In 1996; Here's What He Thinks Of The Amazon Merger

Mark Ordan owned a grocery store business, Fresh Fields, in the 1990s, which he sold to Whole Foods Market in 1996. He is now a turnaround specialist who focuses in the food retail industry and offered his take on the organic grocery store's history and recently completed merger with Amazon.com, Inc. (NASDAQ: AMZN) in an interview with The Washington Post.

Whole Foods' business hasn't shied away from charging a premium price for its items compared to conventional grocery chains, Ordan explained. But now that Amazon decided to lower its grocery prices, the company can still sustain its profit margins through various efficiencies.

In fact, Whole Foods' business model may not be sustainable over the long-term, he suggested. The retail category as a whole, especially grocers, can't operate forever by charging higher prices despite holding a key differentiating factor. The grocery chain's struggles were made clear to investors through disappointing same-store growth rates and loss of market share in its core organic, fresh and natural food category.

"There are no patents in retail," he said. "If you admire what Whole Foods is doing, you can copy it. There are a lot of good companies out there."

Finally, Amazon boasts the necessary know-how to "fix" Whole Foods, Ordan also stated. The e-commerce giant not only knows what customers want but how to make sure they receive what they want in a timely manner. These two strengths can result in Whole Foods morphing into an "enormous" giant as Amazon is "far and away the best at logistics, far more efficient than any supermarket chain."

Related Links:

Beginning To Understand The Whole Foods' Pricing Dynamic

4 Topics Of Interest As The Amazon-Whole Foods Deal Is Now Official

Posted-In: food Food Prices Grocery Grocery stores Mark OrdanM&A Tech Media Best of Benzinga

 

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