Whole Foods Market has been jokingly called Whole Paycheck, and for good reason as prices are high for many items at the grocery chain, but that might soon change.
Amazon, which will take official control on Monday of the upscale grocer, intends to cut prices that same day.
The significance of such a move is well beyond prices for organic products such as baby kale or avocados, all of which will have lower prices on Monday than the day before.
Rather this is a way for Amazon’s CEO Jeff Bezos to announce the plan he has for shaking up the industry and taking on big competitors such as Kroger and Walmart.
This is the way Amazon operates said one industry analyst. It is about speed, speed and more speed.
Bezos has been willing on a regular basis to lose money, disappoint his shareholders and start discount warfare in efforts to challenge and hurt his competitors.
During the 23 years Amazon has been operating, Bezos has done that sort of thing over and over again, with diapers, books, and now with his new grocery store chain.
One industry analyst said that Bezos was putting the entire market on notice.
Investors drove down shares of Kroger on Thursday by over 8%, while Walmart shares, fell 2%. Walmart is the nation’s largest grocer. Both Walmart and Kroger shares fell sharply as well when the deal of Amazon buying Whole Foods Market was first announced during June.
Amazon is planning to join its physical stores with his online business through turning it membership program Prime into a rewards program for Whole Foods, providing more savings to its customers.
Amazon Prime is a subscription service that costs $99 per year that gives its members video streaming, free shipping and other benefits.
Products that are Whole Foods private label are going to be made available through the online services of Amazon and the Amazon lockers that are to be installed in some of the Whole Foods locations. Customers can also return their orders from online to Amazon through the same lockers.
An executive with Amazon said the company’s goal is to make organic and healthy foods affordable to all adding that everyone should have the opportunity to shop at the stores and eat the quality food from Whole Foods Market.
Discounts are a big reason shoppers shop at Amazon but convenience and selections are also high on the list and with Whole Foods coming online other grocers should be concerned.