Ok, so quick note: the grocers are getting hammered all of the sudden as Jeff Bezos risk comes calling.
As Bloomberg notes, Sprouts, Kroger, Costco, Wal-Mart, and Target have all turned sharply lower after Amazon and Whole Foods announced their deal will close on August 28.
But the real kick in the balls was this:
- AMAZON SAYS WHOLE FOODS TO CUT SOME PRICES STARTING MONDAY
And ominously, they’re promising “more to come.”
Here’s a quick look at the space:
Full statement:
Amazon and Whole Foods Market today announced that Amazon’s acquisition of Whole Foods Market will close on Monday August 28, 2017, and the two companies will together pursue the vision of making Whole Foods Market’s high-quality, natural and organic food affordable for everyone. As a down payment on that vision, Whole Foods Market will offer lower prices starting Monday on a selection of best-selling grocery staples across its stores, with more to come.
In addition, 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. The two companies will invent in additional areas over time, including in merchandising and logistics, to enable lower prices for Whole Foods Market customers.
“We’re determined to make healthy and organic food affordable for everyone. Everybody should be able to eat Whole Foods Market quality — we will lower prices without compromising Whole Foods Market’s long-held commitment to the highest standards,” said Jeff Wilke, CEO of Amazon Worldwide Consumer. “To get started, we’re going to lower prices beginning Monday on a selection of best-selling grocery staples, including Whole Trade organic bananas, responsibly-farmed salmon, organic large brown eggs, animal-welfare-rated 85% lean ground beef, and more. And this is just the beginning — we will make Amazon Prime the customer rewards program at Whole Foods Market and continuously lower prices as we invent together. There is significant work and opportunity ahead, and we’re thrilled to get started.”
“It’s been our mission for 39 years at Whole Foods Market to bring the highest quality food to our customers,” said John Mackey, Whole Foods Market co-founder and CEO. “By working together with Amazon and integrating in several key areas, we can lower prices and double down on that mission and reach more people with Whole Foods Market’s high-quality, natural and organic food. As part of our commitment to quality, we’ll continue to expand our efforts to support and promote local products and suppliers. We can’t wait to start showing customers what’s possible when Whole Foods Market and Amazon innovate together.”
Here’s what will be new in Whole Foods Market stores on Monday and what customers can expect over time as the two companies integrate:
- Starting Monday, Whole Foods Market will offer lower prices on a selection of best-selling staples across its stores, with much more to come. Customers will enjoy lower prices on products like Whole Trade bananas, organic avocados, organic large brown eggs, organic responsibly-farmed salmon and tilapia, organic baby kale and baby lettuce, animal-welfare-rated 85% lean ground beef, creamy and crunchy almond butter, organic Gala and Fuji apples, organic rotisserie chicken, 365 Everyday Value organic butter, and much more.
- In the future, after certain technical integration work is complete, Amazon Prime will become Whole Foods Market’s customer rewards program, providing Prime members with special savings and other in-store benefits.
- Whole Foods Market’s healthy and high-quality private label products–including 365 Everyday Value, Whole Foods Market, Whole Paws and Whole Catch–will be available through Amazon.com, AmazonFresh, Prime Pantry and Prime Now.
- Amazon Lockers will be available in select Whole Foods Market stores. Customers can have products shipped from Amazon.com to their local Whole Foods Market store for pick up or send returns back to Amazon during a trip to the store.
This is just the beginning — Amazon and Whole Foods Market plan to offer more in-store benefits and lower prices for customers over time as the two companies integrate logistics and point-of-sale and merchandising systems.
Whole Foods is highly overrated and highly over priced – their plan to lower prices would put them more in line with other grocery stores. That’s only part of their appeal problem. The bigger problem is proximity to customer’s homes. People shop at stores close to home! I doubt Whole Foods lowering their pricing will damage competitor’s business. It will all come down to location location location.
– Murphy
I expect Amazon to extend its model of operating at cost to gain market share and leveraging Whole Foods refrigerated distribution infrastructure to allow Amazon Prime Pantry to grow. There is a lot of reason for grocers to worry about an ultra lean innovation monster knocking on their market share’s door.
Home delivery is the new game — lots of them are making that available. One family owned store I know of has that down pat. Great website is key. Great delivery crew critical – know the customers. The “shoppers” take the time to do it right when selecting products for their clients. Get those 3 customer service areas right and the client will not make a change to another store for a few dollars savings. They also have order and load system; use website to order, drive up to store front and they load your order in your vehicle. People really like that – use from office and pick up on way home.
Amazon offers home delivery but has not aced it, not even close.
– Murphy