It's Day 1 at the new Amazon Whole Foods
The Amazon era at Whole Foods Market began Monday with markdowns on key grocery items and a few signs of the things to come for the natural foods grocer.
Amazon, which closed on its deal to acquire Whole Foods on Monday, promised to slash prices on bananas, apples, eggs, salmon and other items on the same day.
A visit to a Whole Foods store in Tampa, Fla., yielded plenty of new signing and discounts on popular items on Monday. (For a slideshow of photos from the store, see the bottom of this story.)
"We don't really know what's coming, this is just the first day. But the lower prices are going to be set prices. They are not just sale prices," said Cindy Lang, an associate at the Whole Foods store in Tampa.
Examples of price cuts at the Tampa Whole Foods store included:
- Whole Trade Bananas: Old price, 69 cents per pound -- New price, 49 cents
- Whole Trade Organic Bananas: Old price, 99 cents per pound -- New price, 69 cents
- Organic Fuji Apples: Old price, $3.49 per pound -- New price, $1.99
- Organic Extra-Large Brown Eggs: Old price, $4.99 per dozen -- New price, $4.19
- Organic Large Brown Eggs: Old price, $3.69 per dozen -- New price, $2.99
- Responsibly-Farmed Atlantic Salmon Filet: Old price, $13.99 per pound -- New price, $9.99
And it wasn't just lower prices that were evident at the store in Tampa.
Employees unfurled and displayed a giant “Whole Foods + Amazon” banner at the store entrance. Cards were placed next to the fresh cut berries with the word “Amazon” printed in green. And signs positioned in different parts of the store greeted shoppers with the proclamation, “We're growing something good. This is just the beginning.”
Yet, Amazon’s new strategy for Whole Foods isn’t actually all that new.
In April, way before a whiff of any deal with Amazon, Whole Foods announced that it would try to reverse a months-long sales slump by doing something it had long been reluctant to do: lower prices. Historically the company has always said that the higher quality of its products deserved higher pricing.
But that strategy has been faltering for a few years. And now the grocer has the power of the Amazon name behind the markdowns, something that could re-ignite sales.
Meanwhile, shares of Sprouts Farmers Market and other grocery stocks fell on Monday as Amazon rolled out the price cuts. Sprouts fell nearly 7 percent, Supervalu lost almost 3 percent and Kroger and Target traded nearly 1 percent lower. Walmart fell about half a percent and Costco traded slightly lower.
Visits on Monday to a nearby Target and Walmart in Tampa yielded no immediate signs of price-matching the products marked down at Whole Foods.
Last week Amazon announced that it would 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 AmazonWorldwide 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.”
Here’s some other changes coming over time as the two companies integrate:
• 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.
Whole Foods Market has more than 460 stores in the United States, Canada, and the United Kingdom.