Amazon’s newly acquired Whole Foods draws shoppers after slashing prices

Amazon Inc.’s (NASDAQ:AMZN) recently acquired organic grocery chain, Whole Foods saw a higher footfall after it cut its prices by as much as 43%.

An analysis by research firm Thasos Group revealed that foot traffic to the grocery store rose by as much as 17% from August 28, the week that the price cuts took place.

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As of the week of September 16, growth decelerated to 4% compared with 2016.

According to Thasos, nearly 25% of the new Whole Foods customers came from Walmart Stores Inc. (WMT), the largest grocery seller in the US, while 16% came from Kroger (KR), and 15% came from warehouse retailer Costco (COST).

“The new customers Whole Foods attracted with its price reduction were the wealthiest regular customers of the competing stores,” according to Boston-based Thasos, reports CBS news.

“The price reduction did not attract a lower-income demographic or incentivize longer driving times to reach [a] Whole Foods store.”

Rivals fighting back

But Walmart is fighting back by boosting its service that provides online orders for collection at the store’s parking lot as well another that delivers food directly to consumers’ fridges.

Target on the other hand is revamping its grocery business while both Kroger and Costco have been beefing up their online businesses.  

Amazon is also test-marketing a prototype for a small market called Amazon Go that operates without checkout lines. The company also has a dozen physical bookstores and plans to open three more soon.

Story by ProactiveInvestors