Forefront Communications

Forbes: Will Whole Foods Benefit From The Amazon Effect?

Sam Belden

Sam Belden

Since Amazon’s acquisition of Whole Foods in mid-2017, analysts have speculated how Amazon might use Whole Foods’ ~450 stores to drive better results for the company.

We’re beginning to see more of how Whole Foods might help capture share within the $700 billion grocery sector for Amazon. In mid-May, Amazon rolled out a pilot program in which Prime members receive weekly discounts on select, best-selling items and additional 10% discounts on items already on sale. The program was recently expanded nationwide on June 27, 2018. Amazon hopes that Prime members will be enticed to begin visiting – or increase their visits to – Whole Foods stores.

Analysts appear to agree that initiatives like these will help drive higher sales at Whole Foods. Consensus estimates today for Amazon’s Physical Stores segment, which is primarily made up of Whole Foods, is roughly $1+ billion higher for 2018, 2019 and 2020.

Amazon is also hoping that Whole Foods can drive additional Prime memberships. In addition to the store discounts, Amazon has increased signage dedicated to Prime at Whole Foods stores. Whole Foods discounts are now added onto a growing list of Prime benefits, including free two-day shipping, Prime Video, music streaming, photo storage and free eBooks. Analysts have continually revised their estimates for Prime members upwards, and consensus expectations are now 9 million members higher than at the beginning of the year.

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