Amazon Cuts Prices on Groceries (and Echo Dots) at Whole Foods

Amazon Plans to Reduces Whole Foods Grocery Prices

Amazon Plans to Reduces Whole Foods Grocery Prices

"Starting Monday, Whole Foods Market will offer lower prices on a selection of best-selling staples across its stores, with much more to come", a press release issued by Amazon on August 24 stated.

Amazon.com (AMZN) is giving its Prime members yet another reason to keep paying $99 per year: a customer reward program at Whole Foods Market.

As of today, Amazon is officially in control of Whole Foods.

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

Amazon is set to takeover Whole Foods Monday, and it's first order of business will be to lower prices on several items.

By buying Whole Foods, Amazon is taking a bold step into brick-and-mortar, with more than 460 stores and potentially very lucrative data about how shoppers behave offline. For example, a Whole Foods in Chicago's West Loop reduced organic avocado prices by 20 percent, while Bloomberg reported that a Manhattan store chopped the price on organic Fuji apples by 43 percent. Cowen & Co. expects it to become the third largest by 2021.

The legal precedents created by those cases give the FTC a basis for unwinding the Amazon Whole Foods deal but have been ignored for decades by federal antitrust enforcers.

Amazon's influence on Whole Foods has begun. Walmart, Target, Costco, Kroger, and SuperValue fell between 2 percent and 8 percent Thursday, with most rising slightly on Friday. Some of the steepest price cuts were on meat: Fresh Atlantic salmon dropped by a third from$15 to $10 a pound, and Hass avocados by almost half.

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Wynn Macau fell almost 2 percent, and Melco International dropped 1.6 percent. "We hope to do something concrete", she said. On Saturday, an estimated 20 water trucks were dispatched to Macau and some 360,000 bottles of water were imported.

But not everyone realizes that Amazon is also the king of online product search.

Once managers and investors at these grocery chains feel enough pressure from a combined Amazon/Whole Foods behemoth, a wave of consolidation might sweep the sector. The battle has shaved profit margins and prompted companies to look at new selling strategies, like Wal-Mart's decision last week to sell its goods on Google's online marketplace.

But despite the price drops, Whole Foods may still be pricier than the competition.

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

Salmon at Union Square Whole Foods.

The purchase of $13.7 billion by the tech giant of Whole Foods sent big warnings through the supermarket industry of $800 billion in the USA earlier this year.

"Given the small market share of Whole Foods and the expensive home delivery model of Amazon/Whole Foods, we do not believe it will have a major impact on the Big Three Canadian grocers", wrote Ms. Wong.

"What they're really doing is they bought 440 distribution centers", said Pachter, referring to the rough number of Whole Foods locations in the U.S. 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.

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