Amazon, which is buying the supermarket chain for almost $14 billion, just announced that it'll slash prices at the grocery stores starting Monday, when the acquisition goes through. Customers will be able to take advantage of lower prices on bananas, organic avocados, brown eggs, organic salmon, animal-welfare-rated 85% ground beef and other staple food items.
The announcement that Amazon will reduce prices on grocery staples at Whole Foods signals a clear intention to remedy what has been one of the grocery chain's biggest weaknesses.
Integration is a major aspect, with Amazon Prime eventually set to become the official customer rewards scheme for Whole Foods patrons - with Prime members set to enjoy saving and other benefits. These include 365 Everyday Value, Whole Foods Market, Whole Catch, and Whole Paws.
Amazon bought Whole Foods Market in a $13.7 billion deal. The Federal Trade Commission (FTC) approved the controversial $13.7 billion transaction on August 23, as did Whole Foods shareholders. Although Whole Foods remains a niche chain - Walmart and Sam's Club, by comparison, have 10 times as many stores- analysts say an Amazon-backed grocer could have broad implications on pricing and profits. "But open up your Amazon app and you can order dinner from Whole Foods and maybe some toilet paper", explained venture capitalist Adam Salomone to theBoston Globe. "Everybody should be able to eat Whole Foods Market quality".
Those arguments will probably not assuage a growing chorus of Amazon critics who believe it is developing too powerful a grip on retail spending, at least on the internet. Whole Foods has plans to expand to more items in the future.
With the new details, Amazon is revealing some of its goals for this acquisition - including gathering customer information from Whole Foods' clientele.
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The era of Whole Paycheck, the derisive nickname for Whole Foods, may be drawing to a close.
Tying Prime membership to grocery buying habits plays squarely into Amazon's strategy of selling all things to all people.
Amazon's competitors are already taking steps to react. While it means that Walmart can offer same-day delivery in regions that Amazon doesn't reach, it also seems like turning to unpaid labor may not be a sustainable solution. Walmart has more than 4,600 stores and previous year started making a multibillion-dollar investment in lowering grocery prices.
"It's ultimately a nice land grab", said Bill Bishop of retail consultancy Brick Meets Click, and a way to get customers "thinking about buying healthy food from Amazon".
Local grocers expressed some trepidation about Amazon's aggressive entry into their business, but said it was part of a long history of upheavals and competition. If the deal, which was first announced in June, closes Monday as expected, the price slashes will go into effect immediately.