Published on: June 20, 2017
If you haven’t already heard, Amazon has purchased the grocery chain Whole Foods for close to $14 billion. The deal has yet to close, but already the industry has been flooded with opinions and speculation about what this means for the future of food retail. To date, this is Amazon’s most aggressive play into grocery, ahead of programs like Amazon Fresh, Amazon’s treasure truck, and other local grocery efforts they have piloted. And the implications are multi-fold. How will Amazon’s online delivery infrastructure make use of the 431 Whole Foods store locations? What does this mean for online grocery shopping? How will Amazon impact Whole Foods high-end prices?
There is a lot to unpack with this news, but in today’s post we wanted to start with a simple price comparison. We looked at four Whole Foods’ circular promotions featuring organic produce (cantaloupe, mini watermelons, red and green grapes, and tomatoes on the vine) and compared them to the regular price and Amazon Fresh’s price. For the products that both Amazon Fresh and Whole Foods stocked, Amazon Fresh’s everyday price was lower than the everyday Instacart price at Whole Foods, but higher than Whole Foods promotional prices. Also, even in this limited data set we see the opportunities Amazon has to expand their product assortment in grocery. Amazon Fresh did not stock organic mini watermelons, and they only offered a 2lb bag of grapes to be ordered online, rather than the typical 1lb pack size found in-store at Whole Foods.
We will continue coverage of the acquisition on our blog as the deal progresses, so make sure to subscribe today, or check back here for updates.