Amazon is cutting the prices of bananas, butter, organic eggs, and other best-selling staples at Whole Foods’ 470 stores, promising customers lower costs and targeting the grocer’s “Whole Paycheck” nickname. The online giant also says its Amazon Prime members will get special prices and perks.
New prices will take effect on Monday — the same day Amazon says it will finalize its $13.7 billion acquisition of Whole Foods. The online marketplace, famous for disrupting the book industry and other retail segments, also laid out its plans for combining its business with an established brick-and-mortar chain.
Amazon customers would be able to receive packages — and return items bought online — at Whole Foods locations that include its Lockers service, the retailer said, outlining what customers can expect to see.
Integration of the two companies will also mean Amazon customers will be able to buy Whole Foods’ private label products through its website and local grocery delivery services. Another change would make Prime the loyalty rewards program for Whole Foods customers.
Amazon sent ripples through the grocery industry when it announced it would buy Whole Foods back in June. But analysts have also noted that the combined company would only control about 2 percent of the U.S. grocery market. The largest share goes to Walmart, with about 14.5 percent, followed by Kroger with 7.2 percent, CNBC reported this summer.
With the new details, Amazon is revealing some of its goals for this acquisition — including gathering customer information from Whole Foods’ clientele.
The list of grocery items that will be cheaper at Whole Foods markets next week ranges from bananas, apples and organic avocados to ground beef, salmon and tilapia, along with organic rotisserie chicken and other products.
Calling the combined venture “the first of a new breed of cyber-physical retailers,” professor Lee McKnight of Syracuse University’s school of information studies says Amazon’s first priority isn’t to boost Whole Foods’ sales volumes — it’s to boost the amount of data the company has about its customers.
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SOURCE: NPR, Bill Chappell