Lower Prices Part of Amazon's Plans for Whole Foods

Amazon to cut Whole Foods prices as soon as deal closes on Monday

Amazon to cut Whole Foods prices as soon as deal closes on Monday

In light of the announcement that Amazon's acquisition of Whole Foods Market is expected to close Monday, the companies announced in a joint news release Thursday that Whole Foods will begin offering lower prices on a selection of the store's best sellers.

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.

Jokingly referred to by many as "Whole Paycheck", Whole Foods revenue growth ran into significant headwinds in recent years as larger grocers with more scale started bringing organic food to their stores at lower prices.

The S&P 500 Food Retail index closed down nearly 5 percent as more than $10 billion was wiped off the market value of big food sellers. For example, if a Amazon Prime customer goes in to purchase something like organic salmon, they may see ads online later for lemon that would taste really good on that salmon previously bought. This week, Amazon - which plans to finalize its takeover on Monday - announced that its first course of business would be to immediately slash prices on key groceries, including bananas, avocados and eggs.

Amazon has promised that Whole Foods prices will become cheaper for a deluge of everyday products starting Monday. And that same day, Whole Foods will offer lower prices on some of its top-selling items.

Amazon Locker
Aside from Whole Foods prices going down customers can now enjoy online shopping and picking up their orders via Amazon Lockers

This is exciting news for anyone who has an Amazon Prime membership and wants to take advantage of perks at Whole Foods.

What does this shift mean for the supermarket industry as a whole?

The prospect of declining profit margins is less of a problem, analysts say, for a technology giant like Amazon, making it possible for Seattle-based company to double down in way Whole Foods couldn't on its own.

"We're determined to make healthy and organic food affordable for everyone", Jeff Wilke, chief executive of Amazon Worldwide Consumer, said this week. More than 70 percent of Whole Foods' main customers are members of Amazon Prime. This should be a warning shot to the grocery industry that has been dominated by other companies such as Kroger and Walmart.

While Whole Foods accounts for less than 3 percent of USA grocery and supermarket sales, the purchase gives Amazon a foothold in a fragile industry that can ill-afford more price cutting. This way, everyone is assured of getting the finest natural and organic foods. continue their The company's relation with trusted vendors and partners around the world will also continue. "If the shareholders don't see WalMart doing something they get nervous and say maybe we should sell our stock and do something else".

Walmart and Google team up for voice shopping
Google Express was launched a few years back but lately it's been upping its game in order to compete on a level playing field. Just this Monday, Wal-Mart announced an expansion of their partnership with Uber to deliver groceries in Dallas and Orlando.

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