A few things:

If your core competency is easy to reproduce, then you will not long be a company of any importance. It's why I don't like Snapchat, and it's why I don't like a lot of other 'hot' companies. They will one day completely be supplanted by their bigger rival who was nice enough to wait for them to do all the work.

Yes. Agree completely. This was the death of Groupon - both Amazon and Google said "shit, you want coupons? We got coupons" and that was that.

The point is, Amazon could do the same thing if they had a grocer.

They could. They won't. Silicon Valley doesn't think Blue Apron has much growth potential beyond what they already have, which is why they beat 'em up over profitability.

Have you ever checked Amazon Fresh's prices? They're not making money on it, and they're charging more than the grocery store down the street. You're also reliant on the people who can't get a book to you in one piece getting an avocado to you in one piece. And sure - they could step it up. But now they're a food packing industry, rather than a food showcasing industry. Again, better to do that out in the Hinterlands and drive it in. There isn't room in the back of a Whole Foods to build a Blue Apron. If this is what you want to do, stream produce into your existing warehouses. Blue Apron, after all, ships across state lines just fine.

The money in a grocery store produce section is in the slices of pineapple that cost 4 times as much as a pineapple. That's the kind of logistics I'm talking about.

Sure - but if Amazon can't sell me that pineapple for less than I can go buy it for, I'm going to go buy it. And Whole Foods can't prep pineapple for less than Costco or Kroger can. And while maybe they can ship it for less, Costco and Kroger have had twenty years since the first dotcom era to see if people want that and they don't. They forcefully don't. I knew a few guys who lost their rippin dotcom jobs at HomeGrocer and none of 'em have popped up doing the same. We tried that 20 years ago and nobody cared. Proximity to a Whole Foods doesn't change that, I don't think.

But operating closer to your customers also cuts the legs out from Wal-Mart.

Whole Foods: 437 stores.

Walmart: 4100 stores.

Walmart is now going online, Amazon is now going brick'n'mortar. I think that, more than anything, illustrates that the expansion is over.

But Whole Foods also, is very profitable.

$500m a year and declining. That's about a million dollars a store. I mean, I wouldn't turn it down. But I wouldn't spend $13b on it, either. They're exquisitely sensitive to an economic downturn and, as you say, their core competency is easy to reproduce (Wild Oats has been doing it since '86; Safeway has been doing it with Sprouts since '00, then there's the Bristol Farms/Haggen/yourlocal contingent).

Look at it this way: Amazon paid 26 years worth of profits for a grocery store. Or, put another way, Amazon paid about eight years' worth of AMAZON profits for a grocery store.

I wouldn't have.