Amazon Acquisitions

Whole Foods Sees More Traffic After Amazon Merger

Whole Foods Market is seeing an increase in brick-and-mortar foot traffic and higher grocery sales since it was acquired by Amazon, despite the fact that its prices are still generally higher than competitors.

The Wall Street Journal reported news that Whole Foods Market employees noted that there has been an increase in brick-and-mortar sales at their respective stores since the merger. A JPMorgan & Chase Co. analysis of four days of car traffic to Whole Foods stores found visits were up compared to before the merger and during comparable periods over the previous three years.

While grocery shoppers in New York, Chicago and the Bay Area reported that they have recently seen the prices on certain items go down a bit, Whole Foods’ prices still remain higher than those at Walmart, ALDI and Trader Joe’s. In fact, a comparable basket of Walmart goods is 37 percent cheaper than at Whole Foods — even after Whole Foods had narrowed the gap by three percentage points before the merger.

“Walmart will not see a major short-term competitive threat even from a repriced Whole Foods Market,” said Craig Johnson, president of Consumer Growth Partners, a market research firm. A Walmart spokesman said the company felt confident of its position in the industry.

Many Whole Foods stores are advertising lower prices. A Goldman Sachs survey of roughly 90 items found that 20 percent were marked down last week, with produce down by 31 percent, packaged goods by 20 percent and refrigerated items by 19 percent from before the merger.

Still, lowering prices on a few items probably won’t do much to woo back Whole Foods customers that have been declining for nine consecutive quarters. Some grocery shoppers said prices would have to fall by 20 percent for them to shop more at Whole Foods.

“It’s called ‘Whole Paycheck’ for a reason,” said Nora Molina, a 32-year-old Whole Foods shopper in Berkeley, who buys most of her groceries at Target or her local grocer.

A Whole Foods spokesperson said that it would continue to cut prices, adding that its products are superior to those sold by its competitors. Amazon declined to comment.


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