Whole Paycheck? Not anymore. Based on our research, “3/4 Paycheck” might be a better nickname for Whole Foods Market following Amazon’s initial price cuts.
A team of GeekWire reporters surveyed prices on selected items this weekend at three Seattle-area stores, then returned to the same locations when they opened this morning to see exactly how much prices are dropping. Amazon is officially completing its $13.7 billion acquisition of the Austin, Texas-based grocery chain, dramatically expanding the Seattle-based tech giant’s brick-and-mortar footprint.
We found an average price reduction of 25 percent on our shopping list of a dozen items. The price cuts ranged from a 50 percent reduction in Haas avocados, from $2.99 to $1.49 each; to a more modest 10 percent drop in 365 Everyday Value organic butter, from $4.99 to $4.49 each.
In the middle of the range, the price of organic responsibly farmed Atlantic Salmon dropped by 29 percent, from $13.99/pound to $9.99/pound.
Bottom line, a shopping list that totaled nearly $80 this weekend fell to less than $60 as of Monday morning.
It’s a wake-up call for the grocery industry, clearly showing Amazon’s ambitions to bring its low-price strategy to its new brick-and-mortar grocery operations. Grocery stocks including Kroger, Walmart, Costco and others are all down this morning on the news.
To be clear, our list is not representative of the savings Whole Foods customers will see on the typical receipt. Our shopping list consisted largely of produce, meat, and staples that Amazon had signaled would be reduced in price. Many other prices in the store — yes, including the popular $8.99/pound hot bar — remain the same. But Amazon has said it will continue to cut prices on more products going forward.
Prices may vary slightly by store within a specific region, based on our observations.
Amazon is focused largely on Whole Foods store brands and items on the outer ring of the store, including Whole Foods 365 Everyday Value items, where prices can more easily be adjusted on the fly. The rapid changeover makes it clear that the Whole Foods and Amazon teams were coordinating in advance at least to a limited extent, which is unusual when corporate acquisitions are still pending.
Developing story, more to come.