Amazon Slashes Whole Foods Prices Again

The cost of products at the grocery chain dropped 2.5% on average over last year.

August 30, 2019

AUSTIN, Texas—Whole Foods prices have fallen around 2.5% on average so far this year, over 2018 prices, CNBC reports. The price drop came after a 3% bump in prices during the first quarter, according to Morgan Stanley.

The lowered prices are part of Whole Foods’ overall strategy to become more competitive with other supermarket chains. When Amazon purchased the chain in 2017, Whole Foods reduced the cost on many items to enlarge its customer base. But suppliers complained, and the chain raised prices on hundreds of products earlier this year.

Morgan Stanley noted the price differentiation between Whole Foods and other grocers has dropped into the 12% to 13% range, after a high of 20%. For example, Kroger previously was 40% less expensive than Whole Foods, but currently experiences only a 27% advantage in price.

Amazon has been trying to find more ways to marry online orders and delivery, along with expanding its grocery outreach. The online retailer has been working on opening a second grocery store chain, with the first location scheduled for California. Additionally, Amazon recently applied for a liquor license to deliver alcohol in San Francisco. Amazon has also expanded its Counter program to include Rite Aid stores.