31 August, 2017
Stores are competing fiercely to attract them.
The $14 billion merger has been made evident at Whole Foods stores across Canada, and Amazon's presence at Whole Foods can't be missed. This means an intensified price war will break out among other grocery businesses.
Amazon's (AMZN) acquisition of Whole Foods (WFM) closed on Monday, August 28. In a list prepared by Bloomberg based on the mid-town Manhattan Whole Foods store, the biggest price change was seen on organic Fuji apples which were now priced $1.99 per pound - 43 percent off from $3.49.
Grom's analysis may be limited because it comes from a single Whole Foods location in Princeton, New Jersy, and a basket of products that were chosen arbitrarily. In all instances, Amazon owns all the infrastructure and equipment involved, with customers paying for services and equipment. Therefore, the company's latest pricing policy should not come as a surprise.
Online grocery services are convenient and save time
Currently, to purchase numerous Whole Foods items you need to have an AmazonFresh membership.
"Amazon and Whole Foods Market technology teams will begin to integrate Amazon Prime into the Whole Foods Market point-of-sale system, and when this work is complete, Prime members will receive special savings and in-store benefits", said the statement from Whole Foods. Still, the results show the market's initial reaction to Amazon's announcement to cut prices at Whole Foods may have been a little overblown, Grom suggests.
Further, Amazon Prime is set to become the customer rewards program at Whole Foods. Amazon is already an e-commerce king and bringing the upscale grocer under its umbrella was definitely a smart move. They're local from China, last we heard. Whole Foods usually sells groceries at a higher price, with quality being the company's focus. Walmart is making it easier to order groceries online and pick them up curbside. The company began a strategic multibillion-dollar investment a year ago to slash grocery prices.
Disclosure: I do not hold any positions in the stocks mentioned in this article.
