eCommerce giant Amazon has announced its multi billion dollar acquisition of brick-and-mortar retail grocer Whole Foods Market will close next week. In addition, Amazon Prime will soon be integrated into the Whole Foods point-of-sale system.
In a press release, the companies said Amazon Prime Members will be offered special savings and other in-store benefits once the integration is complete. The combined company also plans to integrate other areas over time to lower prices for Whole Foods customers.
“We’re determined to make healthy and organic food affordable for everyone,” said Jeff Wilke, CEO of Amazon worldwide consumer in the press release. “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.
“To get started, we’re going to lower prices beginning Monday on a selection of best-selling grocery staples, including Whole Trade organic bananas, responsibly-farmed salmon, organic large brown eggs, animal-welfare-rated 85 percent lean ground beef, and more. And this is just the beginning — we will make Amazon Prime the customer rewards program at Whole Foods Market, and continuously lower prices as we invent together. There is significant work and opportunity ahead, and we’re thrilled to get started,” Wilke added.
With the combined company’s stated goal of making high-quality, natural and organic food affordable for everyone, Whole Foods Market will offer lower prices starting next week on a selection of best-selling grocery staples across its stores — with more to come — as a down payment on that vision. Amazon also said its Amazon Lockers will be available in select Whole Foods Market stores. Customers can have products shipped from Amazon.com to their local Whole Foods Market store for pick up or send returns back to Amazon during a trip to the store.
Seeking Alpha noted in a report that Amazon's pricing strategy with Whole Foods will be watched closely by competitors including Kroger, Target, Costco, Supervalu and Walmart. With Amazon playing disruptor, it remains to be seen if prices drop significantly, and if competitors will have to follow suit or risk losing customers.
That pricing strategy, or fears over that pricing strategy, already helped send grocers' shares down sharply. Kroger slipped 8.1 percent, as CNBC reported, while Supervalu was off 6.5 percent. All told, $12 billion in market cap across the sector was shaved off on Thursday following the confirmation of the acquisition.