Has the "Amazon Effect" dropped prices at Milwaukee's Whole Foods?

Image Whole Foods Market | Plymouth Meeting PA Store

As if this natural disaster weren't enough, online retailer Amazon's recent acquisition of the Whole Foods Market brand has led to several financial repercussions for its competitors.

The biggest hit came for investors in Morrison's, whose shares are down 2.6pc.

The competition is less excited: after the deal was approved by Whole Foods shareholders and the Federal Trade Commission late last week, four major USA grocers' market caps fell by a combined $11 billion, and still haven't fully recovered.

After completing its $13.7 billion purchase of Whole Foods on Monday, Amazon slashed the prices of dozens of items at all 460 of its new grocery stores. "Food retailers of all sizes need to look really hard at their pricing strategies, and maybe find some funding sources to build a war chest". That's because Amazon is likely to follow its day-one price reductions with additional targeted discounts to millions of Amazon Prime members. Whole Foods stores can serve as new distribution points for the AmazonFresh delivery service, allowing Amazon to expand where it offers home deliveries.

Among the items marked down were organic avocados, organic brown eggs, organic salmon, almond butter, organic apples and organic rotisserie chicken. Most importantly, Amazon has announced that customers with Amazon Prime membership will receive other special offers on Whole Foods products as well.

Image: eSellerCafe | Entrance to Whole Foods Market, Pembroke Pines, FloridaMY FIRST SHOPPING TRIP AND IT IS A BUST! Companies have been competing with Amazon and Whole Foods independently until now, but never as a combined solution. "We can't wait to start showing customers what's possible when Whole Foods Market and Amazon innovate together".

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While Kroger is still enticing from a valuation perspective, given its solid store base, Amazon in the space should make potential "new" Kroger investors wary.

In a city with as many grocery stores as Milwaukee, Whole Foods may have to continue to slash prices in order to keep up with the ever-growing market. However, the firm also "spot checked prices on a number of high-frequency items", such as Organic Valley milk, Newman's Own salad dressing and Ben & Jerry's ice cream, finding their prices remained unchanged.

The beginning of this week saw Amazon's purchase of grocery brand Whole Foods Market complete, and the impact on the retailer was nearly immediate.

But despite the price drops, Whole Foods may still be pricier than the competition. The store's front end, meanwhile, was plastered with Whole Foods' online ordering URL. Sprouts was the most severely impacted, with the organic-focused supermarket falling roughly seven percent. Still, the gimmick caught a lot of peoples' attention, and may signal Amazon's willingness to sell devices and other nonfood items in stores.

We also reached out to Amazon for comment. I have no business relationship with any company whose stock is mentioned in this article.

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