Amazon has officially sealed the deal with Whole Foods, and the promised price cuts are already hitting grocery stores.
Bananas for 49 cents a pound, anyone? Marked down from 79 cents, that’s more comparable to other supermarket chains. The organic variety goes for 69 cents a pound in a Manhattan store, down from Sunday’s price of 99 cents a pound.
Just last Thursday, Amazon unveiled that all Whole Foods customers would immediately see “lower prices on a selection of best-selling staples across stores,” following completion of the merger.
This includes discounts on Whole Foods’ 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 percent lean ground beef, creamy and crunchy almond butter, organic Gala and Fuji apples, organic rotisserie chicken, 365 Everyday Value organic butter and more, according to Amazon’s press release.
Notably, many of the items Amazon is promising to discount require a “frequency of purchase,” Raymond James analyst Aaron Kessler told CNBC Friday. They are no items like paper towels that you can stock pile, he added. “You have to buy a lot.”
The Whole Foods store also featured a display of Amazon Echo and Dot devices, marked down to $99.99 and $44.99 each, respectively. Time will tell what other Amazon merchandise starts to pop up in the grocery locations.
Nonetheless, industry watchers still wonder just how much Amazon is willing to foot the grocery bill at Whole Foods.
“There are certain areas where [Amazon] can cut, but there is a limit. If you cut too much, you will destroy the operating profit for Whole Foods.”
At the time of CNBC’s visit to Whole Foods location in New YorkFriday, prior to closing of the deal, organic avocados were selling for $2.99 apiece, organic baby kale and lettuces were priced at $3.99 a container, organic Gala apples were $2.99 per pound, and organic Fuji were $3.49 per pound. Whole Foods’ 365-branded almond butter sold for $7.99 a jar, and animal-welfare-rated 85 percent lean ground beef was $6.99 per pound.
Come Monday, baby lettuce containers were reduced to $3.49, organic Gala and Fuji apples were selling for $1.99 a pound, and jars of 365-branded almond butter were a dollar cheaper, at $6.99 apiece.
Other noticeable discounts in a New York Whole Foods location included a stick of organic unsalted butter selling for $4.49, down from $5.29 per 16 ounces. A 25 ounce jar of Whole Foods’ own organic tomato sauce was cut to $2.79 from $2.99. As promised, organic large brown eggs, animal-welfare-rated 85 percent lean ground beef and chicken were all also on sale.
“[Amazon is] making organic foods accessible to all walks of life in this country,” Greg Fleishman, co-founder of baking mix brand Foodstirs, told CNBC in an interview. “It’s amazing.”
“The whole intent of this [merger] is to retain loyalists, but also to attract an entirely new consumer who was held back because of price,” added Fleishman, who has also worked for Kashi and Coca-Cola.
“Whole Foods’ mission is to not be exclusionary,” he said. “A partnership with Amazon has exploded Whole Foods’ mission.”
One Whole Foods employee confirmed to CNBC that all of Whole Foods’ existing staff will receive a 10 percent discount on Amazon.com the first week following the merger.
Another mentioned how “last minute” everything was thrown together. A survey of Whole Foods employees across various locations in New York over the weekend found that many had no idea about the merger or the discounts coming Monday.
Report courtesy CNBC