Whole Foods is slashing seafood prices – or is it?
Whole Foods has announced a new round of price cuts across several categories, including seafood – but the pricing strategy may not be effective.
Soon after Amazon officially acquired Whole Foods on 28 August, Whole Foods announced price cuts of around 40 percent on a number of items, including responsibly farmed salmon and tilapia.
The new cuts, announced 16 November, include Responsibly Farmed Raw Peeled Shrimp 26/30s, which is now priced at USD 9.99 (EUR 8.49) per pound. The previous price on the shrimp varied by region. Whole Foods is also offering discounts on turkeys, chickens, chicken broth, canned pumpkin, and a number of other seasonally popular items.
This strategy initially proved effective, as customers bought USD 500,000 (EUR 424,719) worth of goods at Whole Foods within the first week after the merger, according to One Click Retail. However, analysts say the price cuts did not last – and may not be effective in the long term. Barclays’ research found that foot traffic at Whole Foods’ stores slowed in October after a busy September.
"This data could suggest that WFM traffic benefitted in September from curious shoppers entering the premises (but not necessarily making any purchases) following its acquisition by AMZN, but according to the data, traffic then moderated in October as most shoppers resumed their normal behavior," Barclays said, according to The Street.
Barclays also found that Whole Foods could be reducing labor at its stores, including in its fresh seafood departments.
"At one store, a seafood counter employee indicated that there was less labor in their store and, in our visits, it did seem as if there were fewer employees," Barclays said in the research. "In addition, we noticed a sign in a different store that advertised a phone number for customers to call if they needed employee assistance.”
Additionally, prices fell only around 1.2 percent on average, according to research firm Gordon Haskett’s survey of 110 products at Whole Foods over a five-week period.
“Moreover, while some goods saw their prices cut sharply early on, they've begun creeping back up as time wears on,” The Motley Fool reported.
Frozen food prices were 7 percent higher on 26 September than they were on 28 August, according to Gordon Haskett, while snack food prices rose 5.3 percent, and dairy and yogurt prices increased by 2 percent.
Despite prices trending higher at his stores, Whole Foods Market co-founder and CEO John Mackey is still touting the company’s new strategy.
“These are the latest new lower prices in our ongoing integration and innovation with Amazon, and we’re just getting started,” Mackey said. “In the few months we’ve been working together, our partnership has proven to be a great fit. We’ll continue to work closely together to ensure we’re consistently surprising and delighting our customers while moving toward our goal of reaching more people with Whole Foods Market’s high-quality, natural, and organic food.”