News

Amazon makes a move at Whole Foods

BY Neil Saunders

(Amazon's $13.7 billion purchase of Whole Foods Market will be finalized on Aug. 28. And that same day, Whole Foods will offer lower prices on some of its top-selling items. Amazon also plans to place lockers in Whole Food stores, and make Amazon Prime the grocer's customer rewards program.)

The takeover by Amazon always meant change was inevitable at Whole Foods. However, that change — much like the deal that facilitates it — is coming much faster than anyone imagined.

The announcement that Amazon will reduce prices on grocery staples at Whole Foods signals a clear intention to remedy what has been one of the grocery chain's biggest weaknesses. It will, at a stroke, help improve basket sizes, transaction values, and customer loyalty.

For the wider grocery market, this is not an immediate threat. Whole Foods remains niche, and its general proposition will continue to be more elevated than most grocers. However, rivals should be under no illusion that they are now dealing with a competitor that is not afraid to damage profits and margins if it creates long term gains. This will only add further pressure to already crimped margins in the sector.

The linking of Prime to Whole Foods is another smart move. Not only will this allow Amazon to target discounts and offers effectively, it will also give it significant intelligence on the preferences and habits of Whole Foods shoppers. Given that 70.3% of Whole Foods core customers are already members of Amazon Prime, the linkage covers a significant part of the existing shopper base.

Finally, the selling of Whole Foods branded products through Amazon's other channels is no surprise. Given the high regard in which the brands are held, this will provide a measurable improvement to Amazon's own food proposition. Moreover, it will facilitate greater volumes which will generate economies of scale and cost savings down the line.

Amazon is wasting no time in making the most of its newest division. Worryingly for others in the market, these things are only the opening salvo in what will be a time of rapid change.

Neil Saunders is the managing director at GlobalData Retail.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

POLLS

On Friday, the Trump administration ramped up its trade dispute with China, announcing $50 billion in tariffs. What is the most likely outcome of this move. (Choose up to 3)
News

HBSDealer Stock Watch: HBP Leads Way

BY HBSDEALER Staff

Building products stocks fared well on Monday as HBP jumped 7.83% while BLDR was up 5.55%,

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

POLLS

On Friday, the Trump administration ramped up its trade dispute with China, announcing $50 billion in tariffs. What is the most likely outcome of this move. (Choose up to 3)
News

Patrick Duffy joins railing company

BY HBSDealer Staff

Tampa, Florida-based Greco Aluminum Railings announced Patrick Duffy as their newest architectural representative.

With 23 years in the architectural industry and owner of Advanced Building Products, Duffy (pictured, left) has consulted on some of the most technologically advanced high-rise buildings in the Chicago and Milwaukee regions, according to the company’s announcement. He earned his degree in civil construction management from Bradley University in Peoria, Illinois. Duffy will cover the Illinois and Wisconsin markets for Greco.

Duffy’s company, Advanced Building Products, represents manufacturers of windows, curtainwall, entrances, skylights, railings and panel systems, including: Oldcastle Building Envelope, Ruskin, FRP Architectural Doors, East Coast Metal Systems, and, now, Greco Railings.

“Greco is already well known in Chicago, and its track record of high quality products will continue to be attractive to both architects and contractors in the Midwest,” he says. “We can be a single source supplier for the facade of the building, starting with the balconies, and adding glass, panels and other materials. That means more convenience and reduced costs.”  

Jim Ellsworth, President of Greco Aluminum Railings USA, Inc. welcomes Duffy to the team: “We’re pleased to bring on a rep with such vast experience in the architectural industry,” he says. “Pat’s connections with contractors, designers, and architects are greatly valued.”

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

POLLS

On Friday, the Trump administration ramped up its trade dispute with China, announcing $50 billion in tariffs. What is the most likely outcome of this move. (Choose up to 3)