Just about a month since the industry-shaking Amazon-Whole Foods buyout went into full effect, Whole Foods has already seen the new money rolling in. With parent company Amazon lowering the prices upwards of 300 items, Bloomberg reports the efforts have been rewarded with a 25 percent increase in sales.
Bloomberg’s report cites data from a study done by Foursquare Labs Inc., which compiled location information from shoppers’ mobile devices during the first two days after Amazon completed its acquisition of the grocer, then compared it with the same period a week earlier.
As we previously reported, Amazon had revealed that its strategy will be to make organics, and other healthy food such as produce, affordable to a new demographic of shoppers, lowering its prices on some items by as much as 43 percent. “Everybody should be able to eat Whole Foods Market quality," Amazon Worldwide Consumer CEO Jeff Wilke said. "We will lower prices without compromising Whole Foods Market’s long-held commitment to the highest standards.”
However, that 25 percent jump may be in some part driven by shoppers who were curious to see what some of the changes brought on by the Whole Foods buyout would bring. Bloomberg’s analysts caution that the real test will be to see if the retailer can sustain this high level of traffic.
“A lot of people went to see what they could see,” said Jennifer Bartashus, Analyst at Bloomberg Intelligence. “The question is if they think the prices are low enough to change their shopping behavior—it takes a very long time to change a consumer’s perception of prices and value.”
On the opposite side of the coin, Amazon has always been finding success through selling he Whole Foods 365 Everyday Value brand through its e-commerce site. Having added about 2,000 private-label Whole Foods products to the site after the deal finalized, One Click Retail reports that Amazon sold out of almost all of them, for a grand total of $500,000 in that first week.
Will Amazon and Whole Foods be able to keep the momentum going and translate it to longterm success? Keep watching Deli Market News for the latest.