Monday, 14 October 2019

Amazon Plans to Lower Some Prices at Whole Foods

Whole Foods

SEATTLE: The era of Whole Paycheck, the derisive nickname for Whole Foods, may be drawing to a close. Amazon, which takes control of the upscale grocer on Monday, intends to slash prices the same day.

The significance of the move goes well beyond the price of organic avocados, baby kale and rotisserie chickens, all of which will cost less on Monday than on Sunday. Rather, it is an outsize way for Jeff Bezos, Amazon’s chief executive, to announce his plan to shake up the grocery industry and take on competitors like Walmart and Kroger.

“This is how Amazon operates,” said Michelle Grant, head of retailing at Euromonitor, a market research firm. “It’s all about speed, speed, speed.”

Mr. Bezos has always been willing to lose money, disappoint shareholders and start discount wars in his efforts to challenge and inflict pain on competitors. In the 23 years that Amazon has been in business, he has done it again and again – with books, diapers and now groceries – fundamentally changing entire retail categories.

“I absolutely think it’s putting the rest of the market on notice,” Bob Hetu, an analyst at Gartner, the technology research firm, said of Amazon’s announcement on pricing.

Investors drove Kroger shares down more than 8 percent on Thursday; shares of Walmart, the nation’s biggest grocer, fell about 2 percent. Both companies’ shares also fell sharply when the deal was announced in June.

Amazon plans to weave together its online business and physical stores by turning its Prime membership program into a Whole Foods rewards program, providing additional savings to customers. Amazon Prime is a $99-a-year service that gives customers faster free shipping, video streaming and other benefits.

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