Published: Tue, August 29, 2017
Economy | By Melissa Porter

Amazon to Cut Whole Foods Prices

Amazon to Cut Whole Foods Prices

Shoppers will find lower prices at Whole Foods stores, including seven in the Twin Cities, starting today when Amazon closes on its nearly $14 billion acquisition of the grocery chain. The deal closed today and Amazon isn't wasting any time implementing changes.

Prime members will receive special savings and in-store benefits when the integration is complete.

At present, the cost of an organic banana in Whole Foods' New York City stores is 36 cents and organic Hass avocados are $2.50 a pop.

But the potential integration of the two companies could eventually go much further.

First spotted by Business Insider, a Brooklyn Whole Foods is selling the Amazon Echo, calling it a "pick of the season", discounting the price of the popular smart speaker.

It could become the mother of all technological revolutions.

Monday's deals will be available for all Whole Foods shoppers, but to take advantage of all future price cuts you'll have to be member of Amazon's $99 yearly subscription service, Prime.

Amazon isn't the only online retailer reaching into grocery stores. All of the major competitors to Whole Foods immediately felt the impact of the news: Kroger, SuperValu, Costco, Sprouts Farmers Market and even Walmart and Target saw their stocks dip in the hours after the announcement.

Whole Foods has 470 stores around the world, including almost 450 in the United States. "I was expecting price cuts across the board". Traditional supermarkets are already dealing intense price-driven competition from all directions, including big-box Walmart, which is the largest grocer in the U.S, and a range of discounters and specialty stores. "If I see the lower prices at Whole Foods, I would start buying those basics here".

She says some of the items that will be marked down include organic avocados, organic brown eggs, organic salmon, almond butter, organic apples and organic rotisserie chicken. But under Amazon, those stores will be turned into warehouses that can distribute groceries to homes around the country.

Does Amazon just want people to be able to afford to eat healthily by making Whole Foods affordable? After all, Amazon has never anxious about turning a profit.

But Amazon's competitors fear its expertise in e-commerce and logistics will help Whole Foods drive down prices and hurt the profit margins of traditional retailers. On Monday, the tab was $75.75, a 23 percent reductions.

Above: Food prices have risen faster than the overall inflation rate.

Discounts were comparable at other Whole Foods stores in San Francisco and Seattle.

Dina Cruz stopped at a Whole Foods in Central Los Angeles on her way to work Monday morning to check for lower prices.

Amazon will make Whole Foods more accessible to more consumers.

There were also non-Whole Foods employees with the group wearing "visitor" stickers - perhaps Amazon employees helping manage the transition. 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. John Mackey will remain as CEO and Whole Foods Market's headquarters will stay in Austin, Texas.

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