Amazon earns big from Whole Foods in first weeks

Amazon logo3Amazon has made a tidy $500,000 from Whole Foods’ private label products on its platform in the first-week, with nearly all of the most popular SKUs selling out, according to third party data.

The e-commerce giant, which bought Whole Foods earlier this year for $13.7 billion, put 2,000 Whole Foods 365 Everyday Value SKUs on its website soon after buying Wholefoods in June.

Data compiled by One Click Retail and first reported by Bloomberg has revealed that items like beans and turkey have gone gangbusters with customers.

Amazon has moved quickly to begin reaping the benefits of its Whole Foods buy, with research from Foursquare Labs pegging an uplift in the grocery chain’s foot traffic of 25 per cent following Amazon’s decision to cut prices by more than 40 per cent in some cases.

One Click said only 7 per cent of the top 100 selling Whole Foods items online remain in stock, as Amazon struggles to keep up with the pace of demand for the products.

The giant indicated that there are more price cuts to come for Wholefoods, as it looks to leverage the business further with improved data analytics, product lines and better delivery options for Prime members.

Amazon’s growing fresh credentials represent a potential threat to the Australian market, with Citi saying last week it anticipates an October launch.

“Amazon is likely to maintain a strategy of matching or being the lowest price in the market at all times. This could spark a response from incumbent retailers who are intent on not being beaten by Amazon on price during the key pre-Christmas sales event. In our view, lower pricing will likely be the result of Amazon’s lower margin and ROI expectations, particularly in the short term,” Citi analysts Bryan Raymond and Craig Woolford said last week.

Local fresh supplier DandyFresh has also approached Amazon to secure a local distribution deal.

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