Amazon’s $13.7 billion acquisition of grocer Whole Foods has had an outsized effect on the retail grocery industry. Whole Foods’ store footprint is dwarfed by that of its rivals, and yet Amazon’s reality distortion field is so powerful that every time the company makes a move, the rest of the grocery industry trembles. Ahead of Thanksgiving, the company has issued a slew of new price cuts on popular items—with even deeper discounts for Prime members. Can the grocery industry service another round of price wars? Stay tuned.
By Rick Ferguson
Whole Foods Market and Amazon announced this week new lower prices on grocery items and holiday staples at Whole Foods Market stores – and an even deeper discount on for Prime members. This offer is a sneak preview of the special savings and in-store benefits Prime members can expect when Prime becomes the official rewards program of Whole Foods Market.
All customers will be able to purchase select organic and no antibiotic turkeys at reduced prices, and just in time for Thanksgiving, Prime members will save even more on turkeys, while supplies last. Whole Foods Market will also offer lower prices starting today on an additional selection of customer favorites and organic brands across its stores. Money quote from John Mackey, Whole Foods Market CEO:
“These are the latest new lower prices in our ongoing integration and innovation with Amazon, and we’re just getting started. In the few months we’ve been working together, our partnership has proven to be a great fit. We’ll continue to work closely together to ensure we’re consistently surprising and delighting our customers while moving toward our goal of reaching more people with Whole Foods Market’s high-quality, natural, and organic food.”
In a statement, the company also said that the announcement of “new lower prices and collaborative programs are another step forward in the integration between the companies. Whole Foods Market and Amazon will together continue innovating to provide customers with a great shopping experience, in-store offerings, and lower prices.”
Notice how many times the statement references “lower prices,” and it becomes clear why this announcement is rocking the grocery world. Never mind that Whole Foods prices are historically much higher than its competitors, and never mind the small footprint; the announcement is essentially the declaration of a new round of price wars, with Amazon and Whole Foods signaling their willingness to go to the mattresses to take market share from their competitors. Prime will be the weapon Whole Foods will take into this battle. Its competitors will need to come up with an answer, and soon—the stock prices of Kroger, Walmart, and Costco all fell when the announcement hit the street.
Rick Ferguson is Editor in Chief of the Wise Marketer Group and a Certified Loyalty Marketing Professional (CLMP).