Grocery stocks were clobbered Thursday afternoon after Amazon announced that it will be cutting prices at Whole Foods. Shares in both Kroger and Walmart—which generates more than half its revenue from grocery sales—fell on the news, with Kroger down more than 8%.
Amazon will begin with price cuts to some organic fruits and vegetables, egg, organic rotisserie chicken and ground beef, among other items. ""We're determined to make healthy and organic food affordable for everyone," Amazon said in a statement.
Why it matters: Amazon is in a unique position, because so far its investors have put up with the firm making very little in profit, on the hopes that it will continue to gain market share in the growing number of sectors in which it competes. Meanwhile, the grocery segment already operates with very low margins of less than 2% according to IBISWorld, compared with an overall 8.8% margin for the S&P 500. Logic dictates that investors will eventually revolt if Amazon refuses to raise profits, but this may come too late for competitors in the grocery segment.
📈 LinkedIn CEO talks techlash — ⚖️ Rahm Emanuel warns against impeaching Trump — 🤖 Some online influencers aren't human
At an Axios event in Chicago yesterday, Mayor Rahm Emanuel told me midterm Democratic candidates are unwise to rely on the allure of impeaching President Trump as an issue in November's races.
His advice: "I lived through the Clinton White House. This is a serious legal and constitutional, not political, issue. ... I couldn't be angrier at Donald Trump. ... That said, you don't just flippantly say: We're for [impeachment]."
The backdrop: The N.Y. Times reported that Republicans are trying to energize their base and lure moderate voters by warning that Dems "will immediately move to impeach President Trump if they capture the House."
P.S. Rahm's big idea for governments ... One of the most common complaints to Chicago's 311 hotline is streetlights being out, and Mayor Emanuel told me the city is converting 270,000 sodium bulbs, one by one, to an LED smart grid model:
