Amazon started to implement drastic changes within its latest successful acquisition, Whole Foods. On Monday, the company became the rightful owner of the $13.7 billion business. The news concerned most players in this industry as Amazon is known for aggressive strategies and vast expertise in marketing and logistics. Therefore, the behemoth chose to start simple yet effective with lower prices.
Amazon Will Address the Single Major Weak Point Whole Foods Has with Lower Prices
Last week, Amazon announced that at the beginning of this week it would trigger substantial changes within Whole Foods. These first steps are regarding prices only. Therefore, customers are going to better enjoy the quality-price ratio regarding products such as brown eggs, organic bananas, ground beef, salmon, and many others.
This single move is enough to overturn the negative reputation the company created around prices. Customers have even dubbed such supermarkets as “Whole Paycheck.” Therefore, Amazon is tackling the sole weak points directly this business has. However, enthusiasts shouldn’t expect large bargains overnight. Nonetheless, the price cuts will hit key products, and their value is unknown yet.
Amazon Might Put the Quality of Products in Jeopardy
The question remains how Amazon is capable of offering lower prices starting with day one of Whole Foods ownership. The answer is in fact in the assets the retail giant already possesses. The company controls a large supply chain already which represents a work of art even for the big players in this industry.
On top of that, Amazon has already an international name for itself. Therefore, producers are willing to negotiate better prices just to be part of this one big family. The large scale of the company is matching the infrastructure Whole Foods came with. Forrester analyst James McQuivey is confident that the top-notch logistics would be an enough element to reduce prices substantially.
“The (profit) margins at Whole Foods probably were too high.”
However, this move can prove to be a double-edged sword. With lower prices can come lower quality. If this happens, Whole Foods would be nothing else than just another common supermarket around the corner. The company managed to create a solid community of customers only by promising organic and natural edible products.
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