Forefront Communications

CBS MoneyWatch: Amazon’s Whole Foods is Stealing Customers From Everybody

Mark Dowd

Mark Dowd

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, according to an analysis of mobile phone location data by research firm Thasos Group.

Thasos found that foot traffic to Whole Foods, which had been mocked for years as “Whole Paycheck” because of its high prices, rose 17 percent during the week of the price reductions beginning on Aug. 28. As of the week of Sept. 16, growth had decelerated to 4 percent compared with 2016, though it remained elevated compared with the three weeks proceeding the price cuts.

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, the largest U.S. seller of groceries. Another 16 percent came from Kroger, the No. 1 operator of conventional supermarkets and 15 percent came from warehouse retailer Costco.

“The new customers Whole Foods attracted with its price reduction were the wealthiest regular customers of the competing stores,” according to Thasos. “The price reduction did not attract a lower-income demographic or incentivize longer driving times to reach [a] Whole Foods store.”

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