Amazon Is Slashing Whole Foods' Prices By 20 Percent On Hundreds of Items (wsj.com)

An anonymous reader quotes a report from The Wall Street Journal: Amazon is planning to cut prices on hundreds of items at Whole Foods stores this week (Warning: source paywalled; alternative source), as the e-commerce giant seeks to change the chain's high-cost image amid intense competition among grocers. The price cuts affect more than 500 products and include a focus on produce and meat, according to documents viewed by The Wall Street Journal. The move comes after Whole Foods raised prices on select items in February, mostly consumer products, as suppliers increased their prices because of higher transport and ingredient costs.

The latest cuts -- which are set to drop at Whole Foods stores on Wednesday -- are some of the broadest since Amazon bought the grocer for nearly $14 billion in 2017. Prices will be reduced by an average of 20 percent on the selected items. The e-commerce giant has tried to extend its own reputation for low prices and convenience to Whole Foods, to counter a sense among some consumers that shopping there required a "Whole Paycheck." The discounts include more produce and meat products than the earlier cuts. The price of organic-rainbow carrots, for instance, will drop by $1, to $1.99, and the price of Black Forest ham will drop $3 a pound to $9.99. The companies also said Monday that Amazon Prime members would be able to save more than before at Whole Foods, with double the number of weekly Prime Member deals and deeper discounts. The report adds that the price cuts are expected to last at least through the end of the year.

Comments

Loss leaders are a key factor

[WillAffleckUW]

Most grocery chains use loss leaders to bring people into stores. Resetting the prices for meat and produce means people in the market for that will come in, and then they can put such items in places that have you pass by other items they haven't marked down "oh I need eggs, oh I need yogurt, oh I need a Prime Steak, since I get a 20 percent discount" and then you feel like you won, even though your bill isn't really that much lower.

Except people like me, who buy the cheap things in bulk and visit 2-5 stores a week on our way home, buying only the sale items at each venue. For most people the time element means they'll spend their whole paycheck there (hence the original nickname for Whole Foods, which is Whole Paycheck). Which is sub-optimal. It's also why you buy lottery tickets that return only 45 cents on the dollar. You think you win, but you don't. Buy raffle tickets instead.

Re:Slashdot: news for housewives and senior citize

[Impy the Impiuos Imp]

Yay! Asparagus Water is only $6 now!

Re:Amazon is insufficiently managed.

[Rei]

It's a common but sneakier technique: you cut prices on "daily staples" but not everything else, because it's mainly the staples that people price shop on. So they look at the price on the bread, milk, etc and see, "That's pretty similar to that other, more downmarket grocery store", and don't notice how much more non-staples cost.