The dealer also set an eye for an even greater opportunity: Convince several of their approx. 100 million US federations to buy their groceries at Whole Foods.
Amazon has been trying to make Whole Foods more attractive to Prime members since the acquisition. Amazon initially reduced the prices of products such as salmon and avocado. Then, offering an extra discount on sales products exclusively for Prime buyers last year began to sweeten the Whole Foods offer.
Despite these steps, most Prime members still disappear in the organic grocery chain. Only about 18% of Prime members shop at Whole Foods at least once a month, and 70% of premiers say they rarely or never act on Whole Foods, according to a recent study by Wolfe Research.
Whole Foods & # 39; high prices have been a major reason why premiers have stayed away. Although Amazon made splashy discounting moves in the beginning, Whole Foods prices have crept back in recent months and remain well above competing supermarkets.
"Amazon and Whole Foods understand that price issues still need to be addressed," said Tory Gundelach, analyst at Kantar.
Although Whole Foods helped make natural and organic objects popular with a wide variety of Americans, it has become a victim of its own success. Cheap natural foods have gone into the mainstream and damaged the whole food.
Larger chains like Kroger, Albertsons and Aldi have listed Whole Foods appeal and expanded their own exclusive lines of organic food. Kroger's Simple Truth grew 1
Natural and Organic Foods Are Not Appealing to a Specific High Income Group anymore. That's the way most buyers eat, says Gundelach. "These products can't really be sold with much of a premium anymore."
Morgan Stanley analyst Vincent Sinisi found that Whole Foods prices for a basket of 60 items have risen in three straight months and was 15% higher than traditional grocery stores in March, including 30% higher in protein. The price of the basket was 2.5% higher last month compared to a year ago.
"It is now clear that Amazon has withdrawn on incremental price reductions," Sinisi said in a research report on Monday.
But Amazon will once again try to lower the prices of hundreds of items at Whole Foods and will double the number of weekly deals for Prime members.
Kantars Gundelach said that grocery stores often cut the prices of products and the latest cut-off route is only used in a fraction of the approximately 60,000 products in Whole Foods stores. "This can't have much influence," she said.
Southeastern Grocers, the owner of Winn-Dixie and Bi-Lo, and Tops Markets have recently filed for bankruptcy. More can be on the way, analysts assume.