As stores discount produce for ‘Day 1’ of Amazon’s plans to revitalize the upscale grocery chain, shoppers are ambivalent about the early changes
This article titled “Amazon’s tech-style takeover of Whole Foods: cheaper produce and ‘farm fresh’ Echos” was written by Edward Helmore in New York, for theguardian.com on Monday 28th August 2017 16.16 UTC
Amid stands of discounted raspberries and “end of summer” organic peaches, Amazon’s effort to revolutionize the US retail grocery business got under way Monday morning with deep price cuts to some produce at its newly acquired Whole Foods chain.
Signs of Amazon’s plans for Whole Foods, purchased for $13.7bn in June with the stated ambition of marrying technology and rapid distribution to the bricks-and-mortar business of food retail – including placing a stand of Amazon Echo devices, discounted from $149.99 to $99.99, next to the organic red seedless grapes. The grapes, in turn, were discounted from $3.99 a pound to $2.49, and large organic California yellow peaches had fallen from $3.49 a pound to $1.49.
The placement of Amazon’s artificial intelligence assistant plainly indicated the company’s plan to integrate grocery shopping and delivery into its online and the Amazon smart AI assistant, called Alexa. In addition to the Echo, the Echo Dot was discounted from $49.99 to $44.99.
One shopper, who gave her name as Celine, said she was unlikely to purchase peaches and the music-playing Echo at the same time, “unless I’m going to a barbecue”.
She said that while she welcomed cheaper prices at the chain often derisively known as “Whole Paycheck”, she was also concerned that Amazon’s entry into the food business could also serve to put smaller retailers out of business, increasing the sense that the Seattle-based tech online shopping behemoth now enjoys monopoly-like power.
Last week, Amazon announced plans to begin integrating the two companies.
“This is just the beginning – Amazon and Whole Foods Market plan to offer more in-store benefits and lower prices for customers over time as the two companies integrate logistics and point-of-sale and merchandising systems,” Amazon/Whole Foods said.
Over time, Amazon plans to integrate its Prime membership program into the Whole Foods checkout process. Amazon will also place its Amazon Lockers package pickup machines in some Whole Foods stores, and make Whole Foods’ private label products available on its website.
Jeff Wilke, the CEO of Amazon Worldwide Center, said on Thursday that the company is determined to make healthy and organic food affordable for everyone.
“Everybody should be able to eat Whole Foods Market quality,” he said. “We will lower prices without compromising Whole Foods Market’s long-held commitment to the highest standards.”
Shoppers in Manhattan – used to paying over the odds for almost everything – welcomed reductions on Whole Trade bananas, Gala and Fuji apples, tomatoes, salads, organic avocados (at two for $3, down from two for $5) and cartons of raspberries (two for $5, down from $4.99 each).
At Agata & Valentina, an upscale grocery close to Whole Foods on Manhattan’s Union Square, price cuts had yet to be matched. Bananas were priced at $1.19 a pound, compared to 49¢ (down from 79¢) at Whole Foods. Similar avocados were $3 each, raspberries at $4.99 a box, and Gala apples at $2.29 a pound. Only tomatoes, reduced from $3.99 to $1.49, matched Whole Foods’ aggressive new pricing.
Another shopper, who offered her name as Wendy, welcomed the early changes. She said she had purchased 6lb of apples instead of four. “I think they want to make it more Walmart,” she ventured, referring to the nation’s largest food retailer, typically found in suburban locations.
Jenna Pairolero said she believed the change in ownership and operations would make “a big difference, probably”. But, she added: “I don’t really pay attention to prices at all, frankly.”
Analysts anticipate that Amazon will be able to use its massive buying power and vast supply chain with the infrastructure of Whole Foods’ 460 stores in the US, Canada and the UK to reduce prices purely through logistics.
The list of products Amazon said it would immediately discount also include organic large brown eggs, baby kale, baby lettuce, “animal-welfare-rated” 85% lean ground beef, organic “responsibly farmed” salmon and tilapia, creamy and crunchy almond butter, organic rotisserie chicken and house-brand organic butter.
Shoppers who had not ventured into the vegetable section said they experienced no difference at the checkout. One customer, Neil, said it was “all about the same” after purchasing pineapple chunks, a bottle of water and a muffin.
Whole Foods employees in Manhattan said teams had worked overnight to prepare for the price drops, known as “day one” at the company.
Nadia Papasidero said she rarely shopped at Whole Foods. “I’m happy to pay a little more for better quality,” she said, but Whole Foods is “big-time too expensive”.
She said that if Whole Foods reduced its prices she would consider making it her “main shop” for groceries. However, Papasidero said she was unlikely to use an AI assistant like Alexa: “I’m Italian, I love food shopping. I need to pick it up and look at it.”
She added: “It’s hard to know what to expect. Clearly, Amazon is a monopoly that’s getting bigger. But from a customer perspective, I love for food to be affordable and still be fair for producers, I will be more eager to buy it.”
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