For Amazon - which has long valued growth ahead of profits - it's a move from a well-worn playbook.
In its announcement of the plan last week, Amazon described its "vision" to make the store "affordable for everyone".
Monday's deals will be available for all Whole Foods shoppers, but to take advantage of all future price cuts you'll have to be member of Amazon's $99 yearly subscription service, Prime. Looking ahead, Amazon hopes to give members of its Prime program special savings and other in-store benefits.
Inc. doesn't need to make money from Whole Foods yet. It could also bring in new consumers who can then be urged to shop for food and other products online.
"Generally Whole Foods goes into markets with six-figure incomes and college-educated residents". Therefore, the behemoth chose to start simple yet effective with lower prices.
"While we are encouraged to see Google continue to enhance its eCommerce/Shopping offering, we believe the attention the announcement received was overblown", Blackledge wrote, noting that only 4% of USA households that buy products online bought groceries via Google Express in July.
Amazon.com, Inc. shares rose $1.24 (+0.13%) in premarket trading Monday. Doing so could shake up the hugely competitive, low-margin grocery industry.
The firm expects broad price cuts across key categories, while some areas such as apparel are drastically paired down. Whole Foods, meanwhile, had been under intense shareholder pressure to improve results and retain customers who have more choices about where to get natural foods.
That could mean a price war that could be tough for Walmart to win.
So why are Amazon and Google buying or teaming up with stores like Walmart and Whole Foods?
At a Whole Foods in Brooklyn, 2 pounds of Atlantic salmon fillets were about $2 cheaper at $19.98 and a 1-pound bag of brown rice was selling for 20 cents less at $2.49, according to labels Amazon and Whole Foods affixed to products on Monday to advertise the shift. Is it for the convenience of being able to use Whole Foods as a distribution point for Amazon orders?
Amazon (AMZN) has officially sealed the deal with Whole Foods (WFM), and the promised price cuts are already hitting grocery stores. Amazon Echo displays have begun popping up in strategic locations in Whole Foods across the country, sporting tongue in cheek signs that market the "farm fresh" device as the 'pick of the season'.