Whole Paycheck is kind of the happening era in nowadays as well as the Whole Foods. Amazon, that takes the control of upscale grocery sellers on Monday, intends to cut the prices the same day.
The significance of the movements goes really well beyond the price of rotisserie chickens, baby kale, and organic avocado. You can get cheaper prices of those all on Monday than on Sunday. Other than that, it is the outsize way of Amazon’s chief executive, Jeff Bezos, to announce the plan to give variations to the grocery industry and get on the competitors like Kroger and Walmart.
Michelle Grand, the head of retailing at Euromonitor said, “This is how the Amazon takes the operation. Speed is what they show us.”
Other than that, Mr. Bezos has always been willingly to lose his own money, start wars of discounts that could disappoint the shareholders just for his efforts related to the challenge and pain that is inflicted on the competitors. Amazon has been in the business for about 23 years and he has done this thing over and over again with many items like diapers and books and now the groceries. Fundamentally, it changes the entire categories of retail.
The investors drove drown the shares of Kroger more than 8 percent on Thursday. The other biggest grocer, Walmart, also got the shares down for 2 percent. The shares of both companies also fell pretty sharply when the deal of the plan was released in June.
Amazon makes plan to weave the online business together and turning the Prime membership program for the physical store. The program gives benefits to the customer like additional savings, faster free shipping, streaming for videos, and other interesting benefits.
Product of Whole Foods with private label will be available on the online service of Amazon. Other than that the lockers of Amazon will be installed in several Whole Foods markets. The customers can return the online orders to Amazon by using the lockers anyway.
Jeff Wilke, the executive who runs the business of Amazon’s consumer stated that they are determined to make the organic and healthy food affordable for all people. Besides, everybody needs to be able to eat the high quality of Whole Foods.
Of course discounts are not the single reason why shoppers visit Amazon. Selection and the convenience offered by this company are the other aspects. But Mr. Bezos has never been so shy to start the price wars that can inflict the pain on its rivals. In the 1990s, the company fought with Barnes & Noble to see that could discount book the most. Amazon and Walmart have also been in an on-and-off price war in various categories for years.
On the battle with Quidsi, a startup company that operated Diapers.com, Amazon gave a lot of pressures on that company so they eventually agreed to be acquired by Amazon instead of Walmart.
The announcement about Whole Foods is acquired by Amazon is pretty surprising actually. The competitors have expected to shake up the things at the grocery which also has struggled in the face of competition with other online shops like Costco and Walmart as well as others that make the consumers wonder about the growing selection of kitchen staples and organic product.
But still, the speed of acquisition that has been completed by Amazon is so stunning especially about the campaign of price cutting that is embarked on. Before three months, the process of acquisition has been completed and usually multi-billion dollars transaction took more than that. Wednesday was the day chose by the Federal Trade Commission to approve the deal.
Of course Amazon did not say how much it could cut the prices in the stores of Whole Foods. 460 stores of which are spread across the US, Canada, and Britain. Further cut in the future is promised. People that have studied the struggles of Whole Foods in the marketplace said that the reductions would be the substantial competitions with other stores anyway.
Mr. WIlke of Amazon also stated that to lower the price would not compromise the product quality at Whole Foods which is the main selling point of the brand. The items that are dropped in prices include organic Fuji apples, responsibly farmed tilapia and salmon, organic large brown eggs, crunchy almond butter, butter, and bananas.
A number of groups include the member Congress and organized labor representatives have raised the concerns about how the acquisition could affect the competition in the business of grocery. But fortunately, the Trade Commission had no problem with that.
The lawyers of antitrust noted that Whole Foods and Amazon were relatively the small players in the business of grocery and in different edge of the market. Amazon is the online grocery with delivery service why Whole Foods has the physical outlet.
That argument may probably not calm down the growing chorus of critics to Amazon who believe the development is too strong on the retail spending grip especially on the internet. However, the announcement from Amazon about the immediate price reductions on the groceries can underscore how the company has taken care of. So far, it stays on the right regulator side.
It maintains to be seen whether the deal would revive the fortunes of Whole Foods or even become the move that requires high cost into the industry that Amazon has failed to master so far. Amazon has offered the grocery business on the internet for a decade but is has had little effect on consumers’ habit that overwhelmingly prefer to buy the groceries in physical stores.
It is obvious that Amazon tries to experiment with the technologies that have automation features so it could some money in physical stores by removing the cashiers. But unfortunately, it has now vowed to use that kind of technology at the Whole Foods to lay off the workers. But the sharp cuts of price on many items in the stores will give some pressure on Amazon to figure out the cost saving somewhere else at Whole Foods.