Skip to comments.Amazon's Whole Foods is stealing customers from everybody
Posted on 10/09/2017 5:00:10 AM PDT by be-baw
Consumers flocked to Whole Foods in droves after the organic grocery chain slashed prices by as much as 43 percent after its $13.7 billion sale to Amazon (AMZN), according to an analysis of mobile phone location data by research firm Thasos Group.
Seattle-based Amazon gained customers at the expense of its rivals in the cutthroat grocery market. According to Thasos, nearly 25 percent of the new Whole Foods customers came from Walmart (WMT), the largest U.S. seller of groceries. Another 16 percent came from Kroger (KR), the No. 1 operator of conventional supermarkets and 15 percent came from warehouse retailer Costco (COST).
For Whole Foods' smaller rivals such as Trader Joe's and Sprouts, the news is even worse. During the first week of the price cuts, Tasos found that 10 percent of Trader Joe's regular customers who shopped at least twice a month defected to Whole Foods compared to the previous week. For the period of Sept. 11 to Sept. 16, the Trader Joe's defection rate was 6 percent. Target's (TGT) customer base shrunk by 3 percent....
(Excerpt) Read more at cbsnews.com ...
Stealing customers is the name of the game.
How does selling a product at competitive prices constitute stealing?
CBS News. Another Marxist 5th column enemy of America
In this case, they will use lower prices enough that regular grocery operations around your area will eventually shut down (figure five years), and then raise their prices by thirty-to-forty percent. Wal-Mart used the same strategy in the 1980s and clobbered out the competition.
I think the nearest Whole Foods is 40 miles away. Don’t see us ever going there.
Mostly Aldi and Walmart.
I was forced to shop at a store I’ve been boycotting for years. The local Shop Rite owner, who has about ten stores in our county made some comments several years ago that he hated gun owners and didn’t want them in his store. I’ve been obliging his wishes even though his store is around the block from us. We were camping and missed a key menu item so we had to go get some. One of their stores was the only store in about 30 miles.
So they’re “borrowing” other stores customers? I think “taking” customers would be the appropriate term.
In a way I wish Wegman's wasn't gonna be near me...because within a year of it opening I'll surely be 400 pounds!
The headline implies they are using force to do it
But notice that Walmart prices are still low.
The regular supermarket business is already a low-margin business with net profits for most around 1.5 cents per each dollar of revenue, and a few around 2 cents.
Amazon’s net profit is nearly the same, at about 1.8 cents per dollar or revenue.
Whole Foods prior net profits were between 4 to 5 cents per dollar of revenue, and Walmart’s in the neighborhood of 3+.
One thing that must be kept in mind is that Whole Foods product was highly over priced, and in both Walmart’s case and Amazon’s what they sell is a whole lot broader than supermarkets.
When Amazon starts cutting into the regular, non-specialized supermarket business, obtaining and living with profit margins on groceries alone of less than 1.5 cents on the dollar, and more regular supermarkets start going out of business, some might start the think that antitrust actions have become too little (if they haven’t already).
Air-chilled chicken is definitely worth the extra money you might pay for it. I don’t pinch pennies when it comes to what I put in my body. Whole Foods has an excellent selection of air-chilled chicken but you can find it in most larger supermarkets these days.
Shop at Wegman's ... but walk there and back. Doubt you will reach 400 lbs that way.
“In this case”
That is exactly what Wal-Mart did and others attempted to do. Sears & Roebuck did it before Wal-Mart long long ago.
Applying this to food is a double end trap.
On the production side you have totally insane laws pertaining to seed production. Global Companies bought the politicians, wrote the new laws to suit them, have put huge cost push on the production side. And now with the US Dollar at a huge high, the export market won’t work. The grain market price has collapsed. We’ve seen a huge drop in our export market because of the exchange rate, we are no longer competitive.
They sell this concept from standpoint of “technology” but the reality is, it is the same game. This one is deadly applied to food.
Ask someone living in Venezuela what food shortages do.
This isn’t stealing, it is using the ability to lower prices to do so in order to draw business, which has been done since the dawn of time.
Regular customers at TJ's who went to check out the new prices at WF right after the Amazon takeover are necessarily "defectors." Only time will tell on that score.
Amazon gained customers at the expense of its rivals
Aka, capitalism. The horror, the horror.
That's weird. You check the parking lot before going into a store and then you drive away if you see a Volvo?
You might hate his politics, but his economics and market strategy bring Amazon the business.
I know a conservative guy who works at Whole Foods. He says he has to pretend to be a liberal to keep his job.
Amazon cutting prices by 43% tells you all you need to know about how overpriced Whole Foods was. And liberals ate it up in Austin.
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