After agreeing to buy Whole Foods back in June, Amazon quickly got to work on ridding the grocery chain of its “Whole Paycheck” image — slashing prices by as much as 40 percent on staple items such as kale, almond butter, rotisserie chickens, and ground beef. Its efforts seem to be paying off: Foursquare data shows traffic to Whole Foods stores surged by 25 percent following said price cuts, Bloomberg reports.
The jump in business isn’t just being felt at brick-and-mortar stores, either: Amazon quickly added Whole Foods’ private label 365 line to its online inventory, selling nearly half a million dollars worth of items like coconut water and lunch meat in the first week via its Prime Now and Prime Pantry platforms, according to data from One Click Retail cited by FoodNavigator-USA. Amazon may still be a relatively small fish in the grocery industry, but its grocery sales for the second quarter of 2017 were up 50 percent over last year, indicating that the ecommerce giant still has plenty of room to grow in that arena.
It’s no surprise that consumers flocked to the chain to scope out the new lower prices, thanks to plenty of media coverage of the price cuts. What will remain to be seen, as Bloomberg notes, is whether or not those prices are low enough to keep new customers coming back. Regardless, the effects of the merger are already being felt throughout the retail industry: Whole Foods’ price cuts led both Target and grocery chain Kroger to slash their own prices in response.
• Amazon's Whole Foods Price Cuts Brought 25% Jump in Shoppers [Bloomberg]
• Amazon Sold $500K of Whole Foods Private Label Items in Week One [FN-USA]
• Amazon Wastes No Time in Slashing Whole Foods’ Prices [E]