Amazon has made several price cuts to reduce the differential between Whole Foods prices and those charged by competing grocers.
A Morgan Stanley report notes that Whole Foods prices are down an average of 2.5 per cent from last year. The price differential between Whole Foods and competitors such as Walmart and Kroger has narrowed substantially.
The price cuts follow lagging growth for Whole Foods in the last few quarters. Seeking Alpha reports that, contrary to expectations following Amazon’s acquisition of Whole Foods two years ago, Amazon did not follow up with further brick and mortar acquisitions or greatly increase the Whole Foods store count, with the result that physical store revenue has lagged.
Still, Seeking Alpha says that despite the price cuts and the disappointing revenue performance, Whole Foods is a net benefit to the Amazon ecosystem and boosts the value proposition for Amazon Prime members.
Photo: Whole Foods Market