Just one day in as the owner of the brick-and-mortar grocery chain Whole Foods Market, Amazon.com cut prices as much as 43 percent. Change is a clear priority for the retailer who advertised its voice-activated electronic assistant Echo and Dot alongside the kale and quinoa.
The purchase of Whole Foods by the tech giant has already sent shock waves through the grocery industry with the change promising to dramatically change the way consumers shop for groceries. With the chain having a reputation for high prices, cutting the prices has come alongside a nickname – Whole Paycheck – showing Amazon means business in taking on competitors like Wal-Mart, Kroger Co. and Costco.
“Price was the largest barrier to Whole Foods’ customers,” said Mark Baum, a senior vice president at the Food Marketing Institute, an industry group. “Amazon has demonstrated that it is willing to invest to dominate the categories that it decides to compete in. Food retailers of all sizes need to look really hard at their pricing strategies, and maybe find some funding sources to build a war chest.”
Examples of the price drop include organic avocados reduced from $2.79 each to $1.99, bananas from 79 cents per pound to just 49 cents and organic rotisserie chickens from $13.99 to just $9.99.
A few competitors in the market have already reacted to the price drop, entering what some industry commentators are calling a new era of selling food in the U.S. The world’s biggest retailer – Wal-Mart has already invested billions into lowering prices across the board in the past year while also investing heavily in its produce section, sight lines and product lines all alongside an aggressive rollout of curbside grocery order pickup.
“Goodbye, Whole Foods as we know it,” Karen Short, an analyst at Barclays Capital Inc. in New York, said in a note. “The conventional supermarket has not evolved much in decades. But Amazon will likely drive drastically different shopping behaviour in grocery. The survival of the fittest has begun.”
Photographer: David Williams