Amazon’s Whole Foods Acquisition is Sweet for Consumers

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Amazon’s Whole Foods Acquisition is Sweet for Consumers

For years, Whole Foods has been a foodie favorite thanks to their many unique specialty offerings and selection of organic produce. Unfortunately, the store was rarely if ever budget friendly, even earning a tongue in cheek nickname Whole Paycheck. However, that reputation could soon be changing as e-retail giant Amazon completes its acquisition of the grocery chain this year.

Yes, Amazon closed its deal to buy Whole Foods on Monday, August 28th and immediately started slashing prices. In fact, as Bloomberg reports, some items fell as much as 40% overnight. For example, a pound of Fuji apples at a Manhattan Whole Foods was found to be $3.49 a pound the Thursday before the acquisition and $1.99 a pound after, putting the chain’s pricing more in line with the national average for comparable products.

Sadly, of the price cuts reported so far, it seems to be limited to mostly produce and a few of other essentials. As a result, most of the store — actually 78% according to CNBC — retains its famously high prices. That said, given that these were just the Day One cuts, it seems likely that additional reductions will come with time, especially from larger brands that can have more flexibility in their pricing margins.

Speaking of margins, one name that comes up again and again in relation to Amazon’s strategy with Whole Foods is Walmart — a chain known for squeezing their suppliers in order to lower prices. That may seem like an odd comparison given the upscale experience Whole Foods has long sought to convey along with the strict quality standards they have for items they sell. However, it isn’t so much that Amazon wants to directly compete with Walmart, but is hoping that lower prices will cause shoppers to buy more, leading to more profit overall. Of course, this approach also leaves room for frugal shoppers to stick to their list and save money.

At this point, it seems up in the air as to whether Whole Foods will actually become a more affordable specialty store akin to Trader Joe’s, but there’s still reason for shoppers to celebrate. For one, hardcore Whole Foods fans — including those with dietary restrictions that the chain often caters to — may now find their grocery bills coming in a bit lower. Additionally, these cuts offer shoppers who have been meaning to eat healthier and buy organic the chance to make the switch without spending a small fortune. Overall, while the Amazon-owned age of Whole Foods is still in its infancy, it certainly seems like a promising time for budget-minded grocery shoppers.

Author

Kyle Burbank

Kyle is a freelance writer and author whose first book, "The E-Ticket Life" is now available on Amazon. In addition to his weekly "Money at 30" column on Dyer News, he is also the editorial director and a writer for the Disney fan site LaughingPlace.com and the founder of Money@30.com.

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