Economy

Whole Foods is stealing Walmart, Trader Joe's customers with low prices

Whole Foods is stealing Walmart, Trader Joe's customers with low prices”

After completing its $13.7 billion purchase of Whole Foods in late August, Amazon slashed the prices of dozens of items at all 460 of its new grocery stores.

By adding brick-and-mortar locations, Amazon has given itself quite a few options for expansion, although its most recent focus has been entirely on the Whole Foods segment. From fresh fish to produce, prices were down across the board. Thasos' study, which compiled location data from 30 million phones across the USA, found that Amazon's price reductions didn't lure lower-income shoppers. Years ago, Amazon was criticized for not posting profits, but critics quickly changed their tunes when the bottom line started showing up.

Whole Foods' foot traffic from new shoppers jumped 33 percent in the first week following Amazon's acquisition, and Wal-Mart regulars accounted for the largest percentage of first-time customers, according to research firm Thasos Group.

Foot traffic to Whole Foods jumped 17 percent during the week that it cut prices, compared to the same week a year earlier.

"Walmart's regular customers accounted for 24 percent of Whole Foods' new customers during the week of the price reduction", said the October 3 report.

One Click Retail breaks down Amazon's first month sales of Whole Foods products
One Click Retail breaks down Amazon's first month sales of Whole Foods products

But Trader Joe's arguably has even more to worry about. Of its regular customer base who went grocery shopping in the first week after the price drop, the chain lost 10% of those customers to Whole Foods in the week after the price drop.

Loyal Kroger customers accounted for 16 percent of Whole Foods' gains, followed by Costco at 14 percent.

Everyone is loving Whole Foods' new low prices - except its competitors.

Customers appear to be sticking around after the price cut.

Shares of Amazon were last seen at $959.50, with a consensus analyst price target of $1,153.60 and a 52-week range of $710.10 to $1,083.31. In many cases, the reduced prices were still higher than similar items at Wal-Mart.



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