Amazon slashes the price of Whole Foods items on its first official day in charge
Ecommerce titan Amazon’s acquisition of Whole Foods, the upmarket supermarket chain, has come to a close and, true to its word, Amazon has significantly reduced items across its stores.
After detailing which items would be getting a reduction last week, prices in many cases appear to have dropped by a staggering 43%, according to Bloomberg investigations. The deal – reportedly worth in the region of $13.7 billion – also sees Amazon Prime customers benefitting from exclusive discounts on a range of groceries.
In the run up to the deal’s denouement, Amazon encountered a slew of political and legal obstacles. One of the most visible came from Congresswoman Marcia L. Fudge, who penned a letter to Attorney General Jeff Sessions detailing her concern “about what this merger could mean for African-American communities across the country already suffering from a lack of affordable healthy food choices from grocers.” She advocated scrutiny “beyond the normal antitrust review process that only examines the competitive impact.” The letter was signed by an additional 11 members of Congress.
However, with the acquisition receiving the green light last Wednesday, Amazon closed the deal on Monday 28 August. In a press release, the firm confirmed Amazon Prime would become Whole Foods’ rewards program, in addition to members of the scheme being entitled to “special savings and in store benefits”.
If you’re looking for concrete information on what those savings will entail, Amazon proffered a pretty good insight. “Starting Monday,” the press release disclosed, “Whole Foods Market will offer lower prices on a selection of best-selling staples across its stores, with much more to come. Customers will enjoy lower prices on products like Whole Trade bananas, organic avocados, organic large brown eggs, organic responsibly-farmed salmon and tilapia, organic baby kale and baby lettuce, animal-welfare-rated 85% lean ground beef, creamy and crunchy almond butter, organic Gala and Fuji apples, organic rotisserie chicken, 365 Everyday Value organic butter, and much more.”
The deal marks Amazon’s largest transaction, outclassing the 2014 acquisition of video game streaming site Twitch Interactive Inc for $970 million in cash.
It’s understood that Whole Foods CEO John Mackey will keep his position after the deal closes, subject to approval from shareholders and regulators.
“This partnership presents an opportunity to maximise value for Whole Foods Market’s shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers,” said Mackey.
“Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,” Amazon CEO Jeff Bezos said in a statement.
Although Whole Foods will keep its name, the deal will give Amazon access to a sizeable network of bricks-and-mortar stores in the US and internationally. This isn’t the first time Amazon has strayed beyond its online marketplace. For example, the retailer has made a recent move into building physical bookshops. It’s even come up with somewhat sinister methods to prevent in-store customers researching competitors.
Amazon already has an established food-delivery arm, called Amazon Fresh – active in the US since 2007 – which dispatches a range of produce including fruit, vegetables and meat. In the UK, this involves a number of partnerships with food suppliers, the main one being supermarket chain Morrisons. While Whole Foods is an American firm, the supermarket food chain also has a number of shops in the UK.