As of today, Amazon is officially in control of Whole Foods. The widely discussed buyout, which ran a cool $14 billion, has several implications for America’s food system, and one of those was price cuts. In some cases, shockingly deep price cuts.
Really, all it takes is looking at the prices on paper, with Amazon cutting the prices on some foods by up to 50%:
That’s from a sample basket that Business Insider put together of some common higher ticket items beloved by Whole Foods shoppers; organic bananas, eggs, salmon, and the like. Some of the steepest price cuts were on meat: Fresh Atlantic salmon dropped by a third from$15 to $10 a pound, and Hass avocados by nearly half. Sorry, organic fans, the organic avocadoes remain unmoved, as does frozen salmon. Still, the sample basket Business Insider assembled dropped by a total of 23%.
Keep in mind, too, that this is just the beginning. Whole Foods was working on price cuts before Amazon arrived with its checkbook. And Amazon brings a degree of purchasing power, as one of America’s largest retailers, to the table that Whole Foods could only dream about.
It also brings a shift in business model. Amazon, quite frankly, doesn’t care that it loses money on its retail operations; those retail operations are just a hobby while running the internet’s back end keeps the company profitable. We’ve likely only seen the start of Amazon’s price cuts and promotions: After all, it loves to offer Prime members incentives to buy from Amazon instead of a competitor. These price cuts may be a big deal, but Amazon is likely just getting started.
(via Business Insider)