Whole Foods Offers Steep Discounts To Prime Members As Rising Energy Prices Squeeze Rivals

In their latest push to reinvigorate the growth of its lynchpin Amazon Prime service, Jeff Bezos & Co. are offering members even greater discounts at Amazon's Whole Foods Stores.

Amazon

Whole Foods will now offer Prime customers another 10% discount on top of the price reductions that have already been announced since Amazon took control of the company.

After a 20% price hike earlier this year, Amazon is facing more pressure to appease its prime membership as analysts worry about slowing growth. The company apparently believes Whole Foods will be an integral part of that strategy, even though its stores only represent a tiny fraction of American grocery stores.

As we pointed out yesterday, with gas prices nearing $3 a gallon sopping up more of consumers' cash, WFM is launching its latest strike against its rivals at a particularly vulnerable time.

Here's the Wall Street Journal:

The online retail giant said it would knock 10% off already discounted items and each week cut prices on other products throughout the store. This week’s deals, for example, include half off wild-caught halibut, buy-one, get-one free 12-pack case of sparkling water and $2.99 for a pound of organic strawberries.

The new deals are available immediately at Florida stores and will be rolling out to its more than 460 stores nationwide this summer. Cem Sibay, vice president of Amazon Prime, said the 10% discount will apply to hundreds or even thousands of already discounted items in each store, while the weekly rotation of deals will typically number in the single digits.

"It’ll be a good mix of produce, meats and seafood," he said.

After revealing that its Prime service has more than 100 million members world-wide, Amazon is worried that it has largely reached its peak adoption among wealthy American households, and that Jeff Bezos might fall short in his quest to become the first trillionaire.

But since the program was introduced in 2005, Bezos has been adding ever more ambitious features. For example, Amazon recently added in-car delivery for Prime members and a Prime Book Box that offers a curated subscription of children’s books at a discount. In some markets, it's even offering one- and two-hour delivery. Unwilling to rely exclusively on wealthy Americans, Amazon recently introduced a $5.99 a month service for families who rely on government benefits.

But as Reuters points out, the new Whole Foods loyalty program might take some convincing. That's because, even after several rounds of price cuts, WFM hasn't been able to shake its "Whole Paycheck" image.

Still, Philadelphia-area Whole Foods shopper and Prime member Heather Kincade, 46, is going to need convincing.

While Whole Foods’ prices on staples like rotisserie chicken, bananas and avocados have come down, she still thinks some every day items are prohibitively expensive. "If I start buying dish soap and other things there, I will have hit the big time," she said.

Though if the cuts make all products at Whole Foods cheaper than its competitors, Prime members might become interested.

Either way, by persistently slashing prices, WFM is pressuring its much larger rivals to consider following suit even as rising fuel costs are contributing to higher expenses.

But while Whole Foods can withstand a prolonged period of losses thanks to Amazon's backing, the small grocery stores that still comprise a large chunk of the American market cannot.

Comments

RAT005 charlewar Wed, 05/16/2018 - 12:18 Permalink

Prime just announced $120 new fee starting soon.  I won't be renewing. My only benefit is fast shipping and lately they have been waiting 2 days to ship afternoon orders. One time I hurried to order something by 2pm Wednesday and it didn't ship until Friday, arrived Tuesday. Videos don't work for me, lousy apps are not on Play and require constant messing with device to accommodate their deliberate unconventional platform. I wonder how many other marginal prime users are loosing interest?

In reply to by charlewar

spastic_colon RAT005 Wed, 05/16/2018 - 12:22 Permalink

none of those prime members will do the math and realize that the $100/year likely doesnt cover the discount they're getting.....I'll stick to my local market store its not filled with a bunch of pretentious pansies.

In reply to by RAT005

mkkby Peterman333 Wed, 05/16/2018 - 13:57 Permalink

LOL, 10% off on produce that's marked up 300%.  What kind of shit head thinks that's a great deal?

Never understood why anyone would pay a fee to enter a store.  Costco and now amazon???  Other stores already beat their prices if you just look.  Maybe entitlement snowflakes are too self important to bother.  They'd rather pretend to be rich while living in momma's basement.

The 2 day shipping is for morons who can't plan ahead.  I rarely need anything in under a week.  If it's really an emergency, what good is the 2 days?  Stupid X 2.

 

In reply to by Peterman333

RAT005 mkkby Wed, 05/16/2018 - 15:31 Permalink

The Costco membership price is easily recovered by households of 3 or more.  2 is marginal and 1 maybe not.  Just the gasoline savings is pretty substantial. 15,000 miles/yr, 30mpg, 500 gallons/yr. Save $0.05/gal = $25/yr. 1/2 annual costco fee before you even go inside and a $1/visit of free samples pays the 2nd half of the membership before doing any shopping.

In reply to by mkkby

TheRunningMan spastic_colon Wed, 05/16/2018 - 13:47 Permalink

Most won't.  Whole Foods is way too pricey and too far to drive.  On Amazon, I only buy the things that are cheapest to my door.  On top of that, I can spend the little bit of non-work time I have doing what I want vs having to go out and shop for things; boxes of shit magically arrive on my porch while I'm at work.  Amazon sure isn't perfect, but it can serve a purpose for some people.  I am glad to see more competitive moves from other e-tailers...I love competition.

In reply to by spastic_colon

ejmoosa spastic_colon Wed, 05/16/2018 - 13:48 Permalink

You are quite mistaken.  I have done the math.  Many prices are now lower than Kroger and Publix, including beer and wine.

 

I'll help you do the math.

 $10 a month to save 5% on groceries, get free shipping, free books on Kindle, free music, and a decent competitor to Netflix.

What does Netflix cost? $10 a month to use on multiple screens.  No music, no free shipping and no discount on groceries.

 

In reply to by spastic_colon

Titus ejmoosa Wed, 05/16/2018 - 14:00 Permalink

Bullshit. I shop at whole foods daily and have done so for more than 3 years. My average daily cost has risen 30% since Bezos bought it. Some items have been discounted, while other rpices have gone way up, often because they have reduced the number of skews so you only have 1 or 2 choices.

Fuck bezos.

In reply to by ejmoosa

Titus Titus Wed, 05/16/2018 - 14:06 Permalink

What pisses me off even more are the new drones they have at the check out counter asking me to donate to their whole planet foundation. I asked one of them how they could ask me for money when Bezos was worth $120 billion. They didn't know who Bezos was.

I am Jack's complete lack of surprise.

In reply to by Titus

RedDwarf spastic_colon Wed, 05/16/2018 - 14:13 Permalink

"none of those prime members will do the math and realize that the $100/year likely doesnt cover the discount they're getting."

It has in spades for me.  I order for friends and family so we all get free shipping.  I also sometimes order very heavy items like treadmills and outdoor storage sheds.  One of those covers the prime membership.

That being said, yes unless you are ordering for multiple people or ordering cargo-freight heavy items or ordering a lot of things, it's not going to be worth it.  Their other benefit, 'Amazon Prime Video', is mostly a joke.

In reply to by spastic_colon

Hal n back RAT005 Wed, 05/16/2018 - 13:31 Permalink

lately, I am offered 1 day shpping and when I get to checkout, its turns out to be 2 day

 

However for the 120 a year, Its convienentt when I buy my sump pump batteries which weigh 72 pounds with 2 day free deliver to my doorstep. Or the other day when I bought a 4 buck cable for my PC monitor with 2 day free delivery.

With higher gas prices, why go out and buy yourself when amazon or its drivers have to absorb the gas price increase.

One of these days amazon will come back to earth.

In reply to by RAT005

scam_MERS RAT005 Wed, 05/16/2018 - 13:41 Permalink

100% agree, I never buy anything from Bozos [sic], I only use his site for reviews, and now many of them are fake too! Check out fakespot.com on anything that Spamazon sells, and you will find a large percentage of fake reviews. So now it's almost useless for the one thing I used it for. I have been boycotting all of them: FB, AMZN, GOOG, NFLX, AAPL, TWTR, and so on. It's not because of the cost, I'm just tired of all these companies destroying our privacy and taking over everything. I will continue to boycott them as long as there are alternatives, I have found I can live without them quite easily.

For sure, you'll never see me shell out $120 for "Prime" slime membership. Not gonna happen. Ever.

Glad to hear you are getting out of it too.

In reply to by RAT005

Endgame Napoleon charlewar Wed, 05/16/2018 - 12:56 Permalink

Business plan for the Bezosmeister from the unemployed-but-not-counted-as-unemployed Endgame Napoleon: 

  1. Buy up a bunch of farmable land, which will serve as a back-up hard asset in case of an economic collapse, or alternatively, buy up a bunch of skyscrapers in prime locations that can serve the dual purpose of investment property and income-generating entities. 
  2. Set up a bunch of 100% robot-staffed organic farms on said land or in said skyscrapers, like the Japanese do. 
  3. Grow robot-raised & organic kale, organic wheat, organic oats, organic bananas, organic melons, organic blueberries and organic strawberries that you can sell for .99, rather than $2.99. Court the growing market of underemployed and overeducated Americans. Grow organic soy to feed America’s legions of soy boys and organic squash to squash what is left of your competition.  
  4. Deliver truly low-cost food to a larger market of environmentally conscious households, where everyone must own a fuel-guzzling vehicle so that moms can avoid raising their own kids to work two-bit, part-time jobs, meeting them halfway between work and home with their Gluten-Free Organic Tofu Value Pack safely stashed in an organic-cauliflower-shaped drone.
  5. Solve at least half of the mass-scale, welfare-buttressed, legal immigration problem—and about 2% of the illegal immigration problem—without putting yourself through the junior-high bully gauntlet and the 24/7 gossip mill that is US presidential politics.

In reply to by charlewar

LawsofPhysics Wed, 05/16/2018 - 12:14 Permalink

Let me be clear, if you have control over real resources and in particular consumable calories then you can do and make real products that are required for survival.

With almost 8 billion people interested in surviving at a decent standard of living, I see plenty of demand!!!

Bullish on real shit, not so much when it comes to financial "products" and digital/paper promises!!!

 

 

Smegley Wanxalot Wed, 05/16/2018 - 12:17 Permalink

Wow, a discount for a store I never shop to entice me to buy a service I don't need?  Hmmm ... won't work with me, but with your average consumerist dumbass it probably will.

ZeroPoint Wed, 05/16/2018 - 12:18 Permalink

Whole Foods has reduced the quality of the items they offer since Bozo took over, and raised costs on a whole lot of items. They no longer have anything I am willing to buy at those prices. As things continue to spiral down, I don't think it will be long before they realize this was a terrible investment and pull the plug.

richsob Wed, 05/16/2018 - 12:19 Permalink

We use the hell out of Amazon but we still find ourselves mostly avoiding Whole Foods because it's just so much more expensive than other grocery stores.  There are some items we buy at WF but the prices have to come down more to be a long term threat to stores like Frey Meyer who have adopted the Kroger floor plan and expanded their selections immensely while keeping prices reasonable.