Amazon's Whole Foods Market reveals deep price cuts

Source: USA Today:

August 28, 2017 at 13:05

Amazon lowered prices on key items at Whole Foods Market, on its first day of acquisition. Here's a before-and-after comparison of five food prices. USA TODAY

NEW YORK -- Amazon kept its promise Monday to lower prices on some key items at Whole Foods Market, its first day as the new owner of the chain long known as high quality but high cost.

Here are examples from a midtown Manhattan store on Monday:

Whole Trade bananas -- 49 cents per pound , from 79 cents
Organic Fuji apples -- $1.99 per pound, compared to $3.49 previously.
Organic large brown eggs -- $3.99 per dozen, a cut from $4.29.
"Animal-welfare-rated" 85% lean ground beef -- $4.99 pound, from $6.99.
Organic rotisserie chicken -- $9.99 each, compared to $13.99 before.

Amazon's $13.7 billion acquisition of the natural-foods chain closed Monday morning.

Whole Foods has for years been mocked as "Whole Paycheck" for its high prices, but Amazon's $13.7-billion acquisition was already bringing about the changes.

Wall Street is paying close attention, including Moody’s retail analyst Charlie O’Shea.

The price cuts are "the first salvo in what we believe will be a period of heavy promotions throughout the grocery industry" as competitors try to figure out how to keep their own customers loyal while making money, Moody said. He predicts larger players, like Walmart, will be able to make it through.

"As we have seen multiple times and in multiple product segments, Amazon has the advantage of not facing the same scrutiny surrounding its profitability from its shareholders as other competitors, and we believe the company will continue to exploit this in the grocery segment," O’Shea said.

Amazon has also begun using Whole Foods to sell non-grocery items. A large sign at the front of one of the Manhattan stores read "Farm Fresh/Pick of the season" to advertise a sale on the Amazon Echo and the Amazon Echo Dot. The two-way wireless smart speakers were going for $99.99 (down from $179.99) and $44.99 (down from $49.99), respectively.

Amazon's expanding beyond more traditional Whole Foods items, like non-dairy ice cream, cashew butter and organic baby food, didn't surprise Forrester technology analyst James McQuivey.

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Follow USA TODAY reporter Zlati Meyer on Twitter: @ZlatiMeyer