Amazon to cut Whole Foods' prices, aims to be 'affordable for everyone'

Amazon to cut Whole Foods' prices, aims to be 'affordable for everyone'

The e-commerce giant will begin slashing prices of Whole Foods products on Monday as soon as the acquisition deal is finalized.

"We're determined to make healthy and organic food affordable for everyone". While likely boosting Prime's membership rolls, it could also induce a broader range of customers to stop more often at Whole Foods - a company that has a reputation for being too pricey for many shoppers.

Whole Foods has rolled out a loyalty program at its smaller, lower-priced 365 by Whole Foods chain, which offers members 10 percent off more than 100 items in the stores.

Calling the combined venture "the first of a new breed of cyber-physical retailers", professor Lee McKnight of Syracuse University's school of information studies says Amazon's first priority isn't to boost Whole Foods' sales volumes - it's to boost the amount of data the company has about its customers.

"It's been our mission for 39 years at Whole Foods Market to bring the highest quality food to our customers", co-founder and CEO John Mackey said.




Amazon Lockers will be available in certain Whole Foods stores, allowing customers to have purchases they made at Amazon.com delivered to the store for pick up, or send returns to Amazon from the store.

Norm Armstrong, an antitrust lawyer at King & Spalding LLP in Washington, told Bloomberg that the FTC approved the deal because Amazon and Whole Foods are not close competitors. Many were anxious that the online giant would use Whole Foods' demographics to expand its food delivery services instead of focusing on making healthy produce available to more people.

"There is significant work and opportunity ahead, and we're thrilled to get started", Wilke said.

The S&P 500's food retail index fell 5%, wiping more than $10bn off the value of big food sellers. Initial popular staples to get a price reduction will include organic bananas, brown eggs, apples, butter, and chicken, animal-welfare-rated 85% lean ground beef, almond butter, and "much more", Amazon's press release said. Amazon will pay $42 per Whole Foods share, an 18 percent premium from its price the day before the tie-up was announced June 16.

Almost 40 years old, the grocery chain boasts more than 460 stores in the US, Canada, and the UK. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.

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