Amazon slashes Whole Foods prices; supermarket shares plummet

Amazon slashes Whole Foods prices; supermarket shares plummet

Online retailer Amazon is to slash prices at US supermarket chain Whole Foods Market Inc in a move which could threaten supermarket rivals.

Amazon first announced it was buying Whole Foods two months ago for $13.7bn (£10.72bn), in a deal that would send “a shockwave across both the online and brick-and-mortar industries, uniting two brands that weren’t seen as obvious partners”, according to Bloomberg.

The retailer has now announced that it will slash prices on a selection of Whole Foods' most popular items including avocados, eggs, salmon and chicken, from next week. Amazon also intends to make Amazon Prime the customer rewards programme for Whole Foods Market to provide Prime members with savings and other in-store benefits.
 
The retailer also intends to make Amazon Lockers available in select Whole Foods Market stores, which means customers can have products shipped from Amazon.com to their local Whole Foods Market store for pick up.
 
According to the Telegraph, industry experts say that the deal will attract a broader range of customers to Whole Foods and threaten supermarket rivals. The newspaper also reported that shares in Tesco, Sainsbury's and Morrisons all fell in Friday trading following Amazon's price-slashing announcement. 
 
Marks & Spencer was the heaviest faller losing 6.8p, or 2.12pc to 312p in late morning, followed by Tesco which was down 3.15p, or 1.68pc, to 184.3p. Morrisons was down 3.66p, or 1.44pc to 249.4p while Sainsbury's lost 3.03p, or 0.99pc to 234.8p

Whole Foods has more than 460 shops with the bulk of stores in the US and Canada and seven in the UK. 

Jeff Wilke, c.e.o. of AmazonWorldwide Consumer, said the company is "determined to make to make healthy and organic food affordable for everyone", adding: "Everybody should be able to eat Whole Foods Market quality – we will lower prices without compromising Whole Foods Market’s long-held commitment to the highest standards. There is significant work and opportunity ahead, and we’re thrilled to get started.”

John Mackey, co-founder and c.e.o. of Whole Foods, is to remain as c.e.o. following the takeover. He said: “It’s been our mission for 39 years at Whole Foods Market to bring the highest quality food to our customers. By working together with Amazon and integrating in several key areas, we can lower prices and double down on that mission and reach more people with Whole Foods Market’s high-quality, natural and organic food.

"As part of our commitment to quality, we’ll continue to expand our efforts to support and promote local products and suppliers. We can’t wait to start showing customers what’s possible when Whole Foods Market and Amazon innovate together.”