Amazon Announces Price Drops, Changes for WFM

Meagan McGinnes Aug. 24, 2017 at 5:34 PM

After months of predicting what’s to come for Whole Foods Market, today e-commerce giant and acquirer, Amazon, gave its first look into the natural retailer’s evolution with a list of strategic changes to be rolled out across all Whole Foods stores starting next week after the deal officially closes on Monday. The announcement comes one day after Whole Foods’ shareholders voted to approve the almost $14 billion deal and the Federal Trade Commission’s Bureau of Competition, announced a decision not to pursue an investigation into the merger.

Most timely, Amazon announced that starting Monday consumers will find lower prices on “best-selling staples” including whole trade organic bananas, responsibly-farmed salmon, organic large brown eggs, almond butter, grass fed beef and 365 Everyday Value organic butter. Whole Foods previously told shareholders that they would lower prices on key items, but those efforts had seen lackluster results. Additionally, a 2018 switch to a global category management system was expected to assist with this goal.

Amazon also announced in a release that Whole Food’s private label 365 brand will soon be available through Amazon.com, AmazonFresh, Prime Pantry and Prime Now. Executives noted the two companies are working to integrate logistics and point-of-sale, and merchandising systems.

Since learning of the merger, the idea of accessibility has been widely discussed issue among industry leaders. While some brands have previously expressed positive sentiments surrounding the implications of lower prices, others have voiced fears about the premium grocer engaging in a race to the bottom.

Whole Foods has spent over a year extensively developing and testing a new rewards program for frequent shoppers, a project that may now be in jeopardy despite executives promising shareholders in May and employees in June that the program would be rolled out nationwide by the end of 2017. The retailer also released a digital couponing app nationwide in February 2016.

Instead, according to the release, Amazon Prime will become Whole Foods Market’s customer rewards program. Prime members, who pay $99 a year for unlimited shipping and free deals, will receive special savings and in-store benefits at the organic and natural retailer.

Bridging the gap between e-commerce and in-store sales, Amazon Lockers will also now be found in select Whole Foods stores, allowing customers to have products shipped from Amazon.com to their neighborhood grocer for pick up. The convenience play is key at a time when shoppers have been increasingly dividing their shopping trips among numerous retailers in order to get the best prices and quality available to them. It also allows Whole Foods to retain its quality standards while giving consumers access to all the products they want to purchase.

Whole Foods CEO John Mackey said in the release he thinks the new strategy will help the retailer “double down” on its commitment to quality while reaching more people.

For more information, read Amazon’s complete press release below:

Amazon and Whole Foods Market Announce Acquisition to Close This Monday, Will Work Together to Make High-Quality, Natural and Organic Food Affordable for Everyone

SEATTLE & AUSTIN, Texas– (NASDAQ:AMZN)—Amazon and Whole Foods Market today announced that Amazon’s acquisition of Whole Foods Market will close on Monday August 28, 2017, and the two companies will together pursue the vision of making Whole Foods Market’s high-quality, natural and organic food affordable for everyone. As a down payment on that vision, Whole Foods Market will offer lower prices starting Monday on a selection of best-selling grocery staples across its stores, with more to come.

In addition, Amazon and Whole Foods Market technology teams will begin to integrate Amazon Prime into the Whole Foods Market point-of-sale system, and when this work is complete, Prime members will receive special savings and in-store benefits. The two companies will invent in additional areas over time, including in merchandising and logistics, to enable lower prices for Whole Foods Market customers.

“We’re determined to make healthy and organic food affordable for everyone. 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,” said Jeff Wilke, CEO of AmazonWorldwide Consumer. “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% 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.”

“It’s been our mission for 39 years at Whole Foods Market to bring the highest quality food to our customers,” said John Mackey, Whole Foods Market co-founder and CEO. “By working together with Amazon and integrating in several key areas, we can lower prices and double down on that mission and reach more people with Whole Foods Market’s high-quality, natural and organic food. As part of our commitment to quality, we’ll continue to expand our efforts to support and promote local products and suppliers. We can’t wait to start showing customers what’s possible when Whole Foods Market and Amazon innovate together.”

Here’s what will be new in Whole Foods Market stores on Monday and what customers can expect over time as the two companies integrate:

Starting Monday, 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.
In the future, after certain technical integration work is complete, Amazon Prime will become Whole Foods Market’s customer rewards program, providing Prime members with special savings and other in-store benefits.
Whole Foods Market’s healthy and high-quality private label products—including 365 Everyday Value, Whole Foods Market, Whole Paws and Whole Catch—will be available through Amazon.com, AmazonFresh, Prime Pantry and Prime Now.
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.

This is just the beginning – Amazon and Whole Foods Market plan to offer more in-store benefits and lower prices for customers over time as the two companies integrate logistics and point-of-sale and merchandising systems.

Whole Foods Market will continue to grow its team and create jobs in local communities as it opens new stores, hires new team members, and expands its support of local farmers and artisans. The company will maintain operations under the Whole Foods Market brand, preserve its high standards and commitment to providing the finest natural and organic foods, and continue to source from trusted vendors and partners around the world. John Mackey will remain as CEO and Whole Foods Market’s headquarters will stay in Austin, Texas.

About Amazon

Amazon is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. Customer reviews, 1-Click shopping, personalized recommendations, Prime, Fulfillment by Amazon, AWS, Kindle Direct Publishing, Kindle, Fire tablets, Fire TV, Amazon Echo, and Alexa are some of the products and services pioneered by Amazon. For more information, visit www.amazon.com/about and follow @AmazonNews.

About Whole Foods Market

Founded in 1978 in Austin, Texas, Whole Foods Market is the leading natural and organic foods supermarket, the first national “Certified Organic” grocer, and uniquely positioned as America’s Healthiest Grocery Store. In fiscal year 2016, the Company had sales of approximately $16 billion and has more than 460 stores in the United States, Canada, and the United Kingdom. Whole Foods Market employs approximately 87,000 team members and has been ranked for 20 consecutive years as one of the “100 Best Companies to Work For” in America by Fortune magazine. For more information, please visit www.WholeFoodsMarket.com or @WholeFoods on Twitter.