Amazon moves fast to cut Whole Foods prices

Aug 26, 2017, 01:19
Amazon moves fast to cut Whole Foods prices

In the future, after certain technical integration work is complete, Amazon Prime will become Whole Foods Market's customer rewards program, providing Prime members with special savings and other in-store benefits. Customers can have products shipped from Amazon.com to their local Whole Foods Market store for pick up or send returns back to Amazon during a trip to the store. But the real surprise came with the news that as the first initiative of their combined vision, Whole Foods will offer lower pricing on a selection of best-selling grocery staples.

Whole Foods has more than 460 shops with the bulk of stores in the USA and Canada and seven in the UK. Amazon Fresh has been around for a while, but customers still like to buy their groceries at a store rather than adding unseen fruits and veggies to an online cart. As a huge fan of Amazon and someone who wants to believe in Whole Foods, I see it being most beneficial not only for the two giants but for the individual shopper.

"In some cases, grocery retailers have had to invest between $500 million to $1 billion in order to reduce prices to a level that retained customers and resulted in a net increase in customers", said Brittain Ladd, who until earlier this year was a senior manager working to globally roll out AmazonFresh, Amazon's grocery delivery service.

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Wilke said Amazon will "continuously lower [Whole Foods'] prices as we invent together". Whole Foods has had a complicated relationship with its prices - executives have long maintained that they charge a premium because they sell superior products to those of their competitors - even as consumer and investors have been outspoken about company's premiums in a famously low-margin business.

"Grocery has always been the achilles heel for Amazon", Grant said.

The ever-expanding flywheel effect of Amazon's Prime loyalty will continue with the company's acquisition of Whole Foods.

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The day after the Federal Trade Commission (FTC) stated that there would be no further investigation into Amazon's purchase of Whole Foods Market and if it created unfair industry competition, Amazon dropped the announcement of the price drops.

Among other Whole Foods items getting discounts Monday: avocados, tilapia, baby kale, apples and rotisserie chicken - all organic, according to an Amazon press release. Whole Foods Market Inc. was founded in 1978 and it is an established USA supermarket chain that only features foods without artificial preservatives, colors, flavors, sweeteners, and hydrogenated fats. We saw some of the disruption reflected in the markets yesterday - Kroger's shares fell more than 8 percent after the announcement, while Walmart's dipped 2 percent. Walmart has also significantly increased its investment in online shopping through acquisitions to better compete with Amazon on its main turf.

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