Jim Chanos, a short selling investment advisor, appeared on CNBC’s Halftime Report explaining how Amazon’s new food market partnership with Whole Foods comes after two German companies were already changing the grocery game, known as Aldi and Lidl.
“[They] should scare investors much more than Amazon,” says Chanos. “They are just disrupting the model for the East Coast and South on.”
The grocery industry has changed immensely in the US. Lidl opened 10 US stores in Virginia and the Carolinas. Likewise, Aldi has announced their five-year plan to invest $5 billion globally.
Chanos says that the grocery industry is not only seeing a decrease return on capital, but also facing “razor-thin margins,” especially since Amazon acquired Whole Foods Market which didn’t help.
“For an industry with tiny, tiny margins and then having Amazon show up with Whole Foods just was sort of the last straw,” concludes Chanos.
