Those Cheaper Prices That Whole Foods Announced May Have Been Misleading
When news broke this summer that Amazon was acquiring Whole Foods, many weren't quite sure what the e-commerce giant had in store for the famously pricey grocery chain. But once the ink dried on the deal, it pledged to do at least one thing: drop prices on its most popular products.
The company held its promise for a bit, and did indeed cut costs on everything from avocados to ground beef, but it appears the deal may have been short lived, because some prices are creeping back up again.
Since Amazon officially took over, prices at the chain have dropped just 1% overall, and some of the items it had initially discounted have already gotten more expensive, according to the research firm Gordon Haskett, which tracked the cost of 110 different items over the last five weeks at a Whole Foods in Princeton, NJ. Specifically, it found that the cost of frozen foods has increased by 7%, snack items are up 5.3%, and dairy and yogurt is up 2% -- all compared to prices when the cuts were first announced in late August.
However, the firm's research also revealed that the price for 70% of the items it surveyed have remain unchanged, and some have actually gone down, including in the beverage category, bread and bakery items, and produce, which it found to be down about .5%. Still, it's telling that prices aren't changing that much, especially after the PR blitz it created with the initial discount announcement.
As the Washington Post suggests, this is a classic Amazon strategy -- to cut prices on the most frequently purchased stuff and hike others to cover the costs. This, in theory, gets people in the store and to at least believe prices are cheaper across the board, even if that's not actually true. To wit, it's stuck to its initial markdowns on things like avocados, almond milk, eggs, and apples, which are among its most popular items.
Whether or not this price plateau is temporary or not, Amazon's plan to lure more customers with cheaper offerings is already working. In fact, the week it announced the markdowns, foot traffic to Whole Foods locations was up 17% compared to the year before, and shoppers loyal to other chains have been defecting in droves. For example, 10% of regular Trader Joe's customers flocked to Whole Foods in the first week after the acquisition, while Walmart shoppers represent 24% of new customers overall.
Of course, it's early yet in Amazon's long-term plan for Whole Foods, and odds are it'll be implementing many, many more changes in the coming weeks, months, and years. But until then, you may very well continue paying a pretty penny for frozen pizzas and greek yogurt.