Read an interesting article about the impacts of Amazon on grocery store industry. There are apparently something like 25,800 grocery stores in the US that have annual revenue over $2 million dollars.
This includes the big players like Kroger but also the small regional shops.

The day Amazon announced the purchase of Whole Foods the industry forecast that 30% of the locally owned grocery chains would eventually become untenable. This would manifest itself in how much credit was available to create small stores and how much credit was available to fund them. Already many of these grocery stores are on a COD basis with their supplier chain.

Most of these smaller companies tend to be disbursed throughout the rural areas of our country. For many communities they are the only source of milk, eggs or bread within a 40 mile radius.

If these grocery stores go away what will happen to the communities? Who can live 40 miles from where they buy groceries? Easier to do when you are young, have good eyesight and the roads are clear. Not so good in the winter.

This will likely show up as an argument for introducing anti-trust legislation as regards Amazon.

Amazon's stock doubled last year.
What would happen to this stock value if they were subject to a break up?

What would happen to cabinet shops?
Most of my customers are somehow affiliated with the tech sector. The value of their homes is inextricably linked to a robust tech sector.

On other news, New Zealand is having a tremendous problem with water pollution in their heretofore pristine environment. This is having an impact on tourism. The biggest contributor to water degradation is cattle grown for the dairy industry. These ranchers used to run sheep but now the big money is demand for dairy products in China & SE Asia.

So why can't our milk producers break even in an industry that can't find enough suppliers globally? Too much winning?

Please, 88% of retail stores are brick and mortar.

Brick and mortar sales are growing just not as fast as online sales.

Your doom and gloom take doesn't pass the smell test.

Pat,

There is no doom & gloom in that post. It's just an observation.

My business is very dependent on the tech sector being healthy. Almost all of my customers work directly for the industry. Those that don't live in homes that have valuations similarly dependent on the tech sector.

What if the internet is just a fad?

If its 40 miles to the nearest store I doubt you get 1 or 3 hour fresh delivery. I can get a 1 or 3 hour time slot delivery on fresh items but the prices are not competitive with the local high cost retail store.
The store brand is almost $3 a lb less for fresh boneless chicken breast, the name brand is ,50 per lb less.

The store is about 5 blocks south out of my way on the way home. Wal-Mart is about 3 blocks out of my way, Costco is about 5 miles out of my way the opposite direction of home (round trip).

It will take awhile for Amazon to penetrate the hard to reach areas. It will either be drones or driverless vehicles.
Once the tech is perfected other companies will not be far behind.

Once the tech is perfected the cost goes down and the locals can also utilize the tech for a fee, the same as the discounters.

Why would Amazon make any effort at all in low density areas? The money is in cities and suburbs. And delivery will be a lot easier and more profitable - more stops, more products, more revenue per mile driven.

I don't think Amazon is going to make any effort to go after low density marketplaces.
Why would they?

Where Amazon is going to make it's mark on the hinterlands is the collateral effects of it's impact on the overall grocery ecosystem.

As the grocery sector starts having to work with smaller and smaller margins the amount of capital available to fund and expand the marginal parts of this industry is going to shrink. As the grocery store goes so too does the elementary school and little league baseball and all the other great reasons to live in the country.

This is in turn going to have impact on where manufacturing locates. If you want to attract talented workers you need to locate where talented workers want to live.

It is unfortunate but we no longer have a Strategy & Policy Council or a Manufacturer's Council to help guide our executive branch through these types of analyses. The CEOs who were part of that great campaign no longer think there is any reason to stand next to the odor.

Are you going to stick to the no doom and gloom narrative?

This is just observational Pat.
As the grocery store industry suffers the marginal players will go to pasture sooner.

This does have some ramification to people heretofore served by the marginal grocer.

There are also some possible ramifications with respect to the next election cycle. There is a reason the CEOs of America decided to leave the Strategy & Policy Council and Manufacturer's Council. It had nothing to do with morality and everything to do with the invisible hand of the marketplace.

This group was never a supporter of the candidate Trump. They aligned themselves with him because they thought that there was some chance he would de-regulate the economy and lower taxes. It's looking like he no longer has the political capital to make this happen so there is nothing but downside remaining for those who associate with him.

If the President cannot get his agenda passed then the people who voted him into office will look to someone even more outlandish. The White Supremacy movement, for example, is now openly carrying Nazi flags and feeling very empowered in social media. You didn't used to have the KKK willingly showing their face in public and carrying torches on prime time TV.

Trend this out another three years.
What do you think it looks like then?

We have real problems that need to be fixed. Better instead to have the council of CEOs on your side than not.

Paul,
I think Amazon is testing drone delivery in the UK.

Google is testing in the Outback of Australia. Imagine being 300 miles from nowhere and needing something to survive. Drones there in 4-5 hours.

The remote areas of the world are the famous last mile but its much easier to solve when its over the air versus over land.

Paccar is also experimenting with drones for delivering parts to Kenworth & Peterbilt trucks that are broken down in BF Egypt.

The hangup at current time is mandate that drone be within operator eyesight at all times.

How they drop the package off without killing the family dog will be another problem to solve. Maybe some kind of parachute system? Maybe an initial flyby with a doggie-downer in a Big Mac?

I'm sure you think it is observational, your posts are subjective.

Marginal producers will go bye bye, that is the way it is and always has been, so what, notice how many cabinetmakers have gone that way?

The CEOs of America quit the council because of the fallout from Trump speaking the truth.

You make no mention of Antifa, this will blow over in a couple of news cycles.

I will give you an A for effort but the doom and gloom just doesn't stick.

Pat,

Why do you think what I say is subjective?
Have you read anything about grocery stores in rural America that is different than what I observe?

Why do you think American CEOs quit both of Trump's prosperity councils?

If you think it was because President Trump was merely speaking the truth, why is that Fox News couldn't find a single Republican willing to go on air to support his interpretation of the world?

You are right that this story only has legs for a couple of news cycles but that is because something even dumber is just down the pike.

Fox News & the Trump Supporters