Amazon to close on Whole Foods buyout, plans to cut some grocery prices

by: Linzi Sheldon Updated:

Amazon will close its $13.7 billion buyout of Whole Foods Market Inc. on Monday and plans to cut prices on grocery staples.

"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," said Jeff Wilke, CEO of Amazon Worldwide Consumer.

Starting Monday, Whole Foods will offer lower prices on staples. Amazon gave this list of products that will have lower prices: Whole Trade bananas, organic avocados, organic large brown eggs, organic responsibly farmed salmon and tilapia, organic baby kale and baby lettuce, animal-welfare-rated 85 percent lean ground beef, creamy and crunchy almond butter, organic Gala and Fuji apples, organic rotisserie chicken, 365 Everyday Value organic butter, and more.

It’s a move so fast it surprised even retail experts like Matt Sargent, senior vice president-retail at Frank N. Magid Associates.


TRENDING NOW:

DOWNLOAD OUR FREE NEWS APP

“I think it was something that people assumed was going to happen,” he told KIRO 7 on Thursday. “I think people were a little shocked it happened so soon.”

Seattle-based Amazon wrote in its news release Thursday that 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.

Looking ahead, the Seattle company hopes to give Amazon Prime members special savings and other in-store benefits.

Also, certain Whole Foods products -- such as 365 Everyday Value -- will be available through Amazon.com, AmazonFresh, Prime Pantry and Prime Now.

Sargent believes Amazon is forcing other grocery chains to play catch up. He says there could be benefits for consumers even if they don’t shop at Whole Foods.

“Players like Costco that have been much slower to engage in e-commerce are going to see the need to accelerate their own selling activities in terms of in-store pick up, online ordering,” he said.

Over the last few years, Amazon has expanded its grocery efforts with its AmazonFresh delivery and PickUp program, testing a cashier-free convenience store Amazon Go, and selling prepped
meal kits similar to Blue Apron. The e-commerce giant announced in June that it wanted to buy Whole Foods.

 

Whole Foods shareholders approved the deal Wednesday, and the Federal Trade Commission said it would not block the deal. Amazon.com Inc. will pay
Whole Foods shareholders $42 per share, marking an 18 percent premium from its stock price the day before the tie-up was announced on June 16.

The Associated Press contributed to this report. 

Next Up: