Some Change in Your Pocket: Amazon and Whole Foods Reduce Prices

Over two decades ago, a 30-year-old man quit his day job and started a business in his garage selling books online. Now, he’s one of the wealthiest individuals on the planet and his company could potentially change the availability of fresh food for people throughout the country.

That man is Amazon’s CEO Jeff Bezos. And today is the day he started shaping the future of the grocery industry – and keeping some literal change in your pocket.

Over the past couple of months, you may have heard about Amazon purchasing Whole Foods. But, large companies are always acquiring other companies. So what’s the big deal, right?

The big deal is that today, with the agreement finalized, Amazon and Whole Foods announced that they plan to slash store prices. Some food prices are now reduced up to 43%. While these price cuts won’t suddenly make fresh, high-quality foods accessible to everyone, it’s what these “Day One” changes mean that’s exciting.

Jeff Bezos is incredibly eager to make swift changes to the industry immediately – and make those changes known to his competitors. For instance, if you happen to go down to a Whole Foods today, you’ll find price cuts on all sorts of food staples, such as eggs, bananas, beef, and even our beloved and cherished avocados. For Whole Foods, this change pivots away from their “Whole Paycheck” image of high prices and exclusivity. Now with the full force of Amazon behind them, Whole Foods is on a path to innovate and potentially bring about meaningful, impactful change by opening the door to high-quality foods to more people.

I realize this change doesn’t make a sizeable dent in accessibility, as Whole Foods stores tend to be located in wealthier neighborhoods. But the shift to lower prices, and the promise to bring about more significant change, means you may see more stores sprout up in other locations as their customer base broadens. You may also see competitors respond in ways that benefit more shoppers. Jeff Bezos has made it clear that this change in prices is only the beginning.

Amazon and Whole Foods recently released a joint statement

“Together [we will] pursue the vision of making Whole Foods Market’s high-quality, natural and organic food affordable to everyone. As a down payment on that vision, Whole Foods Market will offer lower prices starting Monday on a selection of best-selling grocery staples across its stores, with more to come.”

“More to come” is that promise of great change. Amazon has proven time and time again that they’re willing to push boundaries and challenge the status quo. The demand for high-quality and organic foods has been continuously growing, and Whole Foods has been the grocer at the forefront of this niche market. But other grocers such as Costco, Walmart, and Kroger are starting to catch on. Already, many of these companies have also started competing by stocking their shelves with fresh organic options. As a result, Whole Foods’ bottom line has suffered. Why? Because most people choose to make their car insurance payment over paying a premium for organic apples. Even so, Jeff Bezos has made no qualms about tackling this huge concern; he’s ready to shake up the market and make high-quality foods more affordable.

Jeff Wilke, the chief executive of Amazon’s consumer services, made this comment:

“We’re determined to make healthy and organic food affordable for everyone. Everybody should be able to eat Whole Foods Market quality – we will lower prices without compromising Whole Foods Market’s long-held commitment to the highest standards.” 

Amazon has emphasized that it will continue to lower prices beyond today’s initial changes and they intend to turn their Amazon Prime membership into a rewards program to offer more savings throughout Whole Foods stores. They’re also making Whole Foods’ private label brand, 365, available on their website through Amazon Pantry and Amazon Fresh.

In other words, Jeff Bezos is gearing up to disrupt a $600 billion grocery industry in major ways in the coming years.

Our team at Javelina is excited to see the inroads Amazon makes as they strive to drive prices down in an industry that impacts us all. More accessible quality food is good for all of us and helps makes the world a little bit of a better place.

While today’s first step isn’t going to drastically make healthy and organic food available for every person in the country, it’s a small change that bodes well for greater change to come. And this is how all impactful change starts: one day, with a small change, even when it seems like nobody is paying attention.

 

Javelina Blog Author Ariel Reyes

Javelina Blog Author

Ariel Reyes, Client & Sales Manager

Ariel Reyes is one of our stellar Client Managers as well as our lead Sales Manager at Javelina. In all aspects of her life, Ariel strives to leverage her skills and abilities in a positive way that contributes to those around her. Read more posts by Ariel.

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