Amazon's first order of business at Whole Foods threatens mainstream grocers like Publix and Kroger

Aug 24, 2017, 2:57pm EDT Updated Aug 24, 2017, 3:20pm EDT

 

 

 

Ashley Gurbal KritzerSenior ReporterTampa Bay Business Journal

 

 

 

Amazon.com is wasting no time in making moves that should help Whole Foods Market Inc. win back the market share its lost in recent years.

Amazon on Thursday said that it will close on its $13.7 billion acquisition of Whole Foods on Monday and immediately launch lower prices "on a selection of best-selling grocery staples across its stores, with more to come."

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A customer loads shopping bags into a vehicle outside a Whole Foods Market Inc. location… more

DANIEL ACKER

Whole Foods in recent years has struggled as mainstream grocers like Lakeland-based Publix and its major competitors like Kroger Co. (NYSE: KR) have expanded their selections of organic and specialty foods. Publix and Kroger have won over would-be Whole Foods shoppers who found they could buy all of their groceries — from organic items to pantry basics — at those traditional grocery stores.

Organic avocados, eggs, fish and greens are among some of the first items to be discounted, Amazon said. The grocer will also roll back prices on organic rotisserie chicken, apples and almond butter.

"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," Jeff Wilke, CEO of AmazonWorldwide Consumer, said in a statement.

Competitive pricing on organic items is key in today's grocery world. Discount german grocer Aldi and Wal-Mart Stores Inc. have both significantly increased the number of organic and natural items they offer. Sprouts Farmers MarketInc., which opened its first Florida stores this year, is also known for discounts on organic items.

Whole Foods' retail footprint — more than 400 stores in the U.S. — is a fraction of Publix's more than 1,100 stores across the Southeast.

But with the Amazon logistics juggernaut behind it, Whole Foods has the potential to reach more customers than ever before. Whole Foods' private label products — 365 Everyday Value, Whole Foods Market, Whole Paws and Whole Catch — will be available through Amazon.com, AmazonFresh, Prime Pantry and Prime Now, the company said.

Amazon is working to integrate its Prime members with Whole Foods' customer rewards program. When that process is complete, Prime members will get special savings and "other in-store benefits" — which Amazon will use to drive traffic back to its physical stores.