Amazon.com did not waste any time. The e-commerce giant on its first day as owner of Whole Foods Market slashed some of the grocery chains’ prices by more than 40%.
At one store in Manhattan on 57th Street, its organic Fuji apples were $3.49 per pound on Sunday but $1.99 per pound on Monday. Its organic avocados went from $2.79 each to $1.99 apiece.
The items marked down were priced on orange signs that read “Whole Foods + Amazon.” the new signs listed the old price, the updated price and a note saying “More to come.”
Electronic assistant and voice activated Amazon Echo was for sale as well at Whole Foods for the price of $99.99, a big pivot into electronics for a business known for selling quinoa and kale. A smaller version of the Echo, Echo Dot, was on sale for $44.99.
The purchase of $13.7 billion by the tech giant of Whole Foods sent big warnings through the supermarket industry of $800 billion in the U.S. earlier this year.
The marriage between the upscale grocery chain and Amazon has promised to change the way its customers shop for their groceries.
Slashing prices at the organic grocery chain, which has such a deep-rooted reputation for high prices that it has been given the nickname of Whole Paycheck, is a signal that the e-commerce giant is very serious about grappling with its competitors such as Kroger Co., Costco Wholesale and the country’s largest grocery chain Walmart Stores.
Price was the biggest barrier to customers of Whole Foods, said an industry analyst. Amazon said the analyst had demonstrated that it will invest to dominate the categories it decides to compete it.
Retailers of food of every size must look very hard at their strategies they have in place for pricing, and find funding of some sort to build their own war chest, added the analyst.
There has been a reaction already to the Amazon kickoff of new prices at Whole Foods Markets.
Walmart, the largest retailer in the world, has invested billions in lowering its prices of all its products over the last year or more, and revamped its produce sections at U.S. locations, improving the sight lines, adding additional fresh fruits and creating its own sweeter cantaloupe.
Those moves, along with its aggressive curbside pickups for grocery orders, has helped the giant retailer post its best growth for food sales in the last five years for its most recently ended quarter.
At the same time, Costco has a complete lineup of organic products that are approximately 30% less than the same items at Whole Foods.