Amazon to lower prices at Whole Foods

Earlier this year we reported on Amazon’s bid to purchase high-end food retailer Whole Foods. The deal is set to close on August 28, and Amazon has announced that it will immediately slash prices on many of Whole Foods’ products. In addition, Amazon Prime members will get special prices and perks. Amazon promises that these price cuts will not come at the expense of quality.

News of the price cuts hit other supermarket chains hard, with their stock prices falling several percent when the announcement was made. Some fear a “race to the bottom”, with retailers already facing slim margins to have to make drastic cuts to keep pace with Amazon, which is known for operating on razor-thin (and often negative) profits. 

The goal doesn’t seem to be crowding out other supermarkets, however, say analysts. They posit that Amazon hopes to achieve two goals: get more data about those who shop at Whole Foods, and get their current Amazon Prime members interested in buying more food online. Consumers have not flocked to online grocery shopping despite several companies making forays into that market. 

Current Whole Foods customers will likely enjoy the lower prices on everything from bananas to organic avocados to ground beef. If the reduced costs last for the long term, perhaps the company will lose its nickname of “Whole Paycheck”.