whole foods
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Whole Foods Prices Cut Again by Amazon Just in Time for the Holidays

Prices are expected to drop on both big brands and private labels
whole foods
LPETTET / istockphoto.com

Amazon’s acquisition of Whole Foods is a gift that keeps on giving. On August 28, the company’s $13.7 billion purchase resulted in a drastic price-drop on salmon, avocados, and bananas. Now, just in time for holiday grocery shopping, the company has announced another permanent price cut.

According to Reuters, Whole Foods will sell organic turkeys for $3.49 per pound to all customers and $2.99 per pound to members of Amazon Prime. Prices are also expected to drop on big brands like Chobani Yogurt and Applegate Hot Dogs as well as private labels such as Eden Foods.

The first time around, Whole Foods’ price reduction paid off for the brand. A study conducted by Thasos Group showed that shoppers were leaving WalMart, Trader Joe’s, and Aldi, among others, to instead shop at Whole Foods. But according to another study, the overall cost of groceries fell by only 1 percent. The brand was able to maintain an illusion of having significantly cheaper products by hiking up the cost on others — like frozen food, which became 7 percent more expensive than its normal price.

But with the new price cuts, U.S. grocers will have to get more competitive than ever.

“This is exactly what the other grocery store competitors have been fearing,” Fort Pitt Capital analyst Kim Forrest told Reuters. “Other grocers are going to have to come back in competitive replies — and it could be better service, better products, and better pricing.”

Related

With Whole Foods’ price reduction on the horizon, it’s no question that this holiday season will be full of joy. But the company hasn’t always spread cheer near and far for all to hear. Here are 18 times Whole Foods got into big trouble.