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Walmart And Google Vs. Whole Foods And Amazon: What About The Others?
September 24 2017, 01:26 | Alonzo Simpson
Amazon Gets Deep Into a Cut-throat Supermarket Scene (AMZN)
Amazon kicked off its first day as the owner of Whole Foods by slashing prices, adding its logo on signs and setting up a stand of "farm fresh" Amazon Echo voice-assistant devices by store entrances.
Major supermarket chains and grocery sellers, including Kroger Co, Sprouts Farmers Market Inc, Supervalu Inc, Costco Wholesale Corp and Wal-Mart Stores Inc, already were grappling with growing pricing pressure when Whole Foods and Amazon announced their $13.7 billion merger deal on June 16.
Price cuts varied slightly from city to city. It's a quick and potentially impactful move given that Whole Foods is traditionally known for its high prices, earning it the sassy nickname, "Whole Paycheck". "For me, it just seems like technology keeps moving, it's disruptive, and it's showing up in places where - probably nobody thought too much three years ago about Amazon merging with Whole Foods", Federal Reserve Bank of Chicago President Charles Evans said shortly after Amazon announced the acquisition. About 90 percent of Prime subscribers live within 10 miles of one of Whole Foods' 460 stores.
But Whole Foods is a different story, because Whole Foods is a different business model, with revenue growth plateauing and net income falling, which has all impacted gross margins and operating margins.
Inc. marked its takeover of Whole Foods Market Inc.by cutting grocery prices and advertising its Amazon Echo devices at a steep discount in numerous natural grocer's stores nationwide.
While Google and Walmart attract the masses, Amazon and Whole Foods have accessed the elite few who can afford the best foods.
INSIDER took photos inside a newly-changed Whole Foods. Customers can either have products shipped from Amazon to their local Whole Foods Market store for pickup, or leave products in the lockers for returns back to Amazon.
While it's not yet been made clear exactly how much prices will drop, health fanatics will see a reduction in their favorite grocery staples such as kale, salmon, tilapia, baby lettuce and rotisserie chicken.
"Lower prices could be catastrophic for some operators", said Madeline Hurley, a senior analyst at market research firm IBISWorld.
Wilke called these efforts "just the beginning", saying that the newly integrated companies would "continuously lower prices as we invent together". Included in their healthy and high-quality private label products is their frozen seafood brand Whole Catch, which has items like seasoned Alaskan cod cakes, swordfish steaks, sea scallops and more.
Walmart and Google are teaming up in the wake of Amazon's purchase of Whole Foods. "We expect more of the same with Whole Foods", analyst Brian Nowak wrote in a note to clients Sunday. It found several items marked with an orange "Whole Foods + Amazon" sign that lists both the old and new price.