Amazon is trying to dissolve Whole Foods' 'whole paycheck' persona by dropping prices on hundreds of items. The discounts, which start Wednesday, will cut prices on more than 500 items ranging from sliced ham to "peak-of-season" produce at Whole Foods locations nationwide. And, while the actual discounts will vary depending on the items, Amazon said customers can expect to save an average of 20 percent on "select items" throughout the store. For example, the price of organic strawberries will drop by $2 to $2.99 per pound and the price of spiral-sliced ham will drop to $3.99 per pound, a savings of at least 33 percent. While the discounts will be available for all shoppers, Amazon said its Prime members can expect to save an additional 10 percent off of sales items. “When Whole Foods Market joined the Amazon family, we set out to make healthy and organic food more accessible. Over the last year, we’ve been working together tirelessly to pass on savings to customers,” Jeff Wilke, CEO of Amazon Worldwide Consumer, said in a statement on Monday. CLICK HERE TO GET THE FOX BUSINESS APP The cuts also come as other big food grocers such as Kroger and Walmart have been trying to keep their prices low after many big food makers like Hershey, Nestle and Unilever were forced to hike prices this year to offset higher freight and ingredient costs. Earlier this month, The Wall Street Journal reported that Amazon is planning to launch a lower-price grocery chain of its own in several major U.S. cities over the next few years. The unnamed chain is expected to be distinct from Whole Foods. The first store of the new chain is reportedly set to open in Los Angeles as early as the end of the year. There also are plans to open two other locations in early 2020. According to the Journal, Amazon has not brought as many Prime members into Whole Foods as it had hoped to since acquiring it in 2017 for $14 billion.<doc-sep>Whole Foods, the high-end grocery store bought by Amazon in 2017, plans to cut prices on hundreds of items by as much as 20 per cent as of Wednesday, including at locations in Canada. Amazon says most of the cuts will come in produce and other fresh items and will amount, on average, to about 20 per cent in savings where they are in effect. It's the third such round of widespread cost cutting since Amazon bought the chain in the fall of 2017. The takeover at the time came as a bit of a surprise, since it was the marriage of two companies with vastly different strategies and markets. Amazon started as an online bookstore and soon grew to become the largest online retailer of just about everything else by focusing on cutting costs while expanding selection and offering delivery speeds that other sellers struggled to match. Its Amazon Prime service, where customers can get same-day delivery on millions of products for an annual fee in Canada of $79, has helped them cement customer loyalty even more. Whole Foods, meanwhile, began as a health food store in Austin, Texas, in 1980 that steadily grew across the U.S. and then into Canada by catering to health-conscious shoppers who didn't mind paying more for items they deemed to be healthier. When Amazon bought the chain, many wondered what the long-term plan was, and Wednesday's move seems to suggest the company may bring its ruthless approach to cost cutting to the bricks-and-mortar world of retail. And the company claims it can do that without sacrificing the quality that won the grocer fans in the first place. "Whole Foods Market continues to maintain the high-quality standards that we've championed for nearly 40 years, and with Amazon, we will lower more prices in the future, building on the positive momentum from previous price investments," Whole Foods co-founder and CEO John Mackey said. "We will continue to focus on both lowering prices and bringing customers the quality they trust and the innovative assortment they expect from our brand." 'Seismic impact' Whole Foods has about 300 U.S. locations and 14 in Canada — mainly in and around Toronto and Vancouver, but also one location in Victoria and one in Ottawa. Strategy adviser Mark Satov, with Satov Consultants, says it's less likely the decision will kick off a move to turn Whole Foods into a discount grocery chain, and more likely Amazon is simply using the chain to figure out how a new business works. "They bought it to learn how to be in the food business," he said. "I think they're just experimenting and marketing to draw a few more people into the store," he added. The store's price point is still out of reach for most Canadians, but by targeting items that people tend to benchmark prices on — things like fresh vegetables — the chain is hoping to win a few more customers for its more expensive items, too. "Once you are inside the store, a couple of things happen," Satov said. "You go and say the milk is $3.69 ... I can afford that, and then you'll buy the freshly ground peanut butter for $18 a tub." Whole Foods currently has more than a dozen locations across Canada. (Lynne Sladky/Associated Press) But Bruce Winder, co-founder and partner at Retail Advisors Network, says the move is a much bigger deal for the hyper-competitive world of Canadian grocery. "It's going to cause a fairly seismic impact," he said in an interview. While he acknowledges the Whole Foods footprint is relatively small in Canada, "it fires a shot over the bow of traditional grocery," he said. The move likely won't cause a flood of people to change their grocery store, he said, but "it's going to wake up some people to consider a switch." If it gets enough of them through the door — and possibly buying new Prime memberships — Winder says it's worth it. That's because most people shop one or two times a week, "and if they can get that customer coming in, invite them into the ecosystem, get them to use Prime — and suddenly you've got a strong rewards system there that keeps the customer within the Amazon world," he said. And ultimately, anything that causes the rest of the industry to take a look at its own businesses is a good thing for everyone. "The consumer wins," Winder said.<doc-sep>All retail bankruptcies are not the same. Here's what you need to know Dollar General's business is booming. It's also vulnerable to crime, police say 3119 E Third Street Dollar General in Dayton, OH on March 12, 2020. NEW YORK, UNITED STATES - 2020/07/08: People wearing face masks shopping inside a retail store in Manhattan as the city enters phase 3 of reopening amid the coronavirus pandemic As New York City enters phase 3 of reopening retail stores for indoor shopping, restaurants have been postponed for indoor dinning. The U.S. Department of Health recorded a total of 3,219,999 infections, 135,822 death and 1,426,428 recovered since the beginning of the outbreak. (Photo by Braulio Jatar/SOPA Images/LightRocket via Getty Images) Party City CEO: Consumers still want to celebrate together NEW YORK, NEW YORK - NOVEMBER 19: A view of the window display as Macy's Herald Square unveils Give, Love, Believe 2020 Holiday Windows on November 19, 2020 in New York City. (Photo by Eugene Gologursky/Getty Images for Macy's) How holiday spirit is surging despite the Covid-19 pandemic This gym is actually opening studios during the pandemic Ever receive a package you didn't order? It could be a scam Here's where your 'free' online returns actually end up One of many large boxes of returned products that fill the warehouse. The returned products in this box will eventually be sorted and categorized. This airplane-shaped bag is selling for more than some actual planes (CNN Business) — Amazon is slashing prices on hundreds of products at Whole Foods for the third time in two years. The cuts will go into effect Wednesday and are mostly focused on produce. Amazon (AMZN) and Whole Foods said customers will save an average of 20% off select items, including greens, tomatoes and fruits. They’ll also double the number of weekly deals for Prime members, and will give those people an additional 10% off “hundreds of sale items” throughout the store. Prime members in dozens of metro areas can also get free Whole Foods grocery delivery if they spend more than $35. The Wall Street Journal first reported the plans. Amazon bought Whole Foods two years ago for $13.7 billion, and has since tried to revamp the premium grocery brand’s “Whole Paycheck” image. The company quickly cut prices on avocados, organic brown eggs, salmon and other items soon after the acquisition. Despite those cuts, prices at Whole Foods have risen for three straight months, according to Morgan Stanley analyst Vincent Sinisi. In March, Sinisi found that Whole Foods’ prices were 15% higher than rival grocers. Meanwhile, Walmart (WMT), Costco (COST) and Kroger (KR) have all lowered their prices. That’s putting pressure on Amazon to follow suit. Amazon is also responding to the rapid expansion of German discount grocers Aldi and Lidl in the United States. Aldi has built hundreds of new stores in recent years and expanded its organic selection in a bid for wealthier shoppers. “They’ve driven prices down, cleverly,” Walmart US CEO Greg Foran said of Aldi last month at a conference. Amazon does not break out Whole Foods’ sales. But revenue at physical stores — which also include cashier-less Amazon Go stores, Amazon bookstores and Amazon 4-Star — fell 3% during Amazon’s most recent quarter compared to a year ago. Amazon blamed an accounting change and a shift in the calendar for the decline. Amazon reportedly plans to open dozens of its own grocery stores in major US cities, separate from Whole Foods. The stores will offer different, cheaper products than Whole Foods, including beauty and health items, the Journal reported last month. Those stores could also help Amazon court shoppers beyond Whole Foods’ wealthy customer base.<doc-sep>
Amazon, which acquired Whole Foods in July 2017, had hoped to convert more Prime members into Whole Foods shoppers. The better Whole Foods is able to sync in-store shopping with Amazon Prime, the better it will be able to target its ads and promotions. The specialty grocer's last major price cut for all customers was in November 2017. In the interim, it has been rolling out more perks catered to members of Amazon Prime, such as offering them an extra 10 percent off discounted products. Whole Foods will slash prices on hundreds of items starting Wednesday, extending its focus beyond enticing Prime shoppers. Prime's ranks surpassed more than 100 million people last year. In addition to free two-day shipping and weekly Whole Foods deals, Amazon's $119-a-year membership service offers streaming of music and movies and free two-hour delivery in certain ZIP codes. Prime members now qualify for two-hour delivery at Whole Foods, they can use Alexa to add groceries to their Prime Now cart with their voice and arrange for grocery pick-up within 30 minutes at some locations. The price cuts planned for Wednesday, however, extend beyond Amazon prime customers. Whole Foods will slash its prices on hundreds of products, with a focus on produce, such as greens, tomatoes and tropical fruits. Customers will save an average of 20 percent on the new reduced-price items. "Whole Foods Market continues to maintain the high quality standards that we've championed for nearly 40 years and, with Amazon, we will lower more prices in the future, building on the positive momentum from previous price investments," CEO John Mackey said in a statement. Whole Foods will continue to build on its special offers for Prime members, as well as efforts to promote sales online. The grocer is doubling the number of exclusive deals for Prime members, it said on Monday. The company also hasn't given up on trying to recruit more Prime members. In April, Amazon will offer Whole Foods customers $10 off a $20 purchase when they try Prime online. New members can try Prime free for 30 days. Read the press release below: