Economy

Here's how much Amazon lowered Whole Foods prices

Here's how much Amazon lowered Whole Foods prices

Don't expect bargains galore - at least, not yet - as Amazon takes over Whole Foods Market, but price cuts starting Monday on some key items will certainly make for a nice start.

Amazon's $13.7 billion purchase of Whole Foods, which will be completed on Monday, has been hanging over a brick-and-mortar retail sector unsure of how to respond to the world's biggest online retailer. "Real value for Amazon will emerge when their consumer profiles stretch beyond the screen and into the physical aisle".

Another shopper, Karen, noting the chain's "Whole Paycheck" image, says she will monitor how long the lower prices last. (NASDAQ:AMZN) would be making subsequent to its purchase of natural foods supermarket chain Whole Foods.

"It's something I worry about", said Lauren Beitelspacher, an assistant professor of marketing at Babson College. "We can't wait to start showing customers what's possible when Whole Foods Market and Amazon innovate together".

And it could entice some current Prime members that might have ruled out Whole Foods shopping previously. That, along with an aggressive rollout of kerbside grocery order pickup, helped the company record its best food sales growth in five years in its most recent quarter.

The company also said certain Whole Foods products will be available through Amazon.com, AmazonFresh, Prime Pantry and Prime Now. The 33-year-old teacher shops at Whole Foods about once a week for baby food but tends to buy the rest of her groceries at Trader Joe's. "(Price cuts) are the low-hanging fruit for them".

"What they're really doing is they bought 440 distribution centers", said Pachter, referring to the rough number of Whole Foods locations in the U.S. "But with Amazon lowering Whole Foods' prices, you could get Whole Foods in towns where you don't traditionally see them", supermarket analyst David J. Livingston said.

The items marked down had orange signs reading "Whole Foods + Amazon". Amazon is hoping to compete with them by inching close to their prices on high-volume staples like bananas, eggs and ground beef in 470 Whole Foods stores. It's able to price lower thanks to a business model that charges membership fees, focuses on selling a limited assortment of bulk-sized goods and features a treasure-hunt experience in the stores.

The lower prices, analysts said, were just one part of Amazon's effort to expand its reach. Included in their healthy and high-quality private label products is their frozen seafood brand Whole Catch, which has items like seasoned Alaskan cod cakes, swordfish steaks, sea scallops and more.

And Whole Foods' strength in organic products has gone from a niche category to a mainstream obsession as competitors such as Wal-Mart and Kroger stocked up at cheaper prices.


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