Amazon fires warning shot with seafood discounts at Whole Foods
Amazon’s acquisition of Whole Foods Market closes Monday, 28 August – and the company is wasting no time in announcing discounts and organizational changes that are rattling the grocery sector.
Starting Monday, Whole Foods will offer lower prices on a selection of best-selling grocery staples across its stores, including responsibly-farmed salmon and tilapia.
“We’re determined to make healthy and organic food affordable for everyone. Everybody should be able to eat Whole Foods Market quality,” CEO of Amazon Worldwide Consumer Jeff Wilke said. “We will lower prices without compromising Whole Foods Market’s long-held commitment to the highest standards.”
Some of Whole Foods’ seafood pricing changes are immediate, and more price drops in the near future, according to Wilke. The company also announced Amazon Prime will become the customer rewards program at Whole Foods Market and the two retailers will “continuously lower prices as we invent together,” Wilke said.
Steven Johnson, grocerant guru at consultancy Foodservice Solutions, told SeafoodSource, said a price war on seafood had already been initiated by Aldi’s introduction of lower-priced fresh seafood in July. But with Whole Foods’ new push for cheaper seafood, all grocery retailers – particularly more upscale chains such as Kroger and Publix Super Markets – will be under enormous pressure to lower their fresh seafood prices, he said.
“You will see the price of fresh seafood coming down at the retail level everywhere,” Johnson said.
Even before Amazon’s acquisition, Whole Foods executives were realizing the need to lower their company’s food prices, Johnson said. Amazon’s purchase of the retailer has made that much more feasible for the company.
“They started ‘365 by Whole Foods” because they knew prices needed to come down,” he said. “[Now] Whole Foods will lower all [its] seafood prices in time – Amazon has buying power; they buy everything globally.”
Other seafood-related changes Johnson expects to see at Whole Foods include a greater focus on local products – citing a pledge made by Whole Foods CEO John Mackey – and a decentralization of its seafood departments. For example, stone crab would go on sale in Whole Foods’ Florida stores the same week as Dungeness crab is put on sale in its West Coast stores and blue crabs are discounted at its Maryland stores.
Whole Foods will also likely run numerous limited-time offers, particularly seafood on Fridays and weekly meal specials, such as poke bowls on Tuesdays in certain markets, Johnson said. And Johnson said for speed and convenience, Whole Foods will start pre-portioning its fresh and frozen seafood into meal-sized portions designed for one, two, and three people.
Perhaps more than any other change, though, the biggest disruption to the United States’ grocery industry created by Amazon’s takeover of Whole Foods may be Amazon’s Prime membership, Johnson said. The tech giant has plans to integrate Prime into the Whole Foods Market point-of-sale system, meaning Prime members will receive special savings and in-store benefits. In addition, Whole Foods’ private label products – including 365 Everyday Value, Whole Foods Market, Whole Paws and Whole Catch – will now be available through Amazon.com, AmazonFresh, Prime Pantry, and Prime Now.
By offering delivery of seafood meals via Amazon Prime Now – a rapid delivery service that’s free for Amazon Prime members, Johnson said Amazon has the potential to revolutionize how seafood is sold in the United States.
“You could have items like scallops, shrimp, and salmon and delivered in an hour,” Johnson said.
Lower seafood prices and easier accessibility to fresh products are big wins for U.S. consumers – and for the seafood industry, Johnson said.
“More people will be exposed to be fish than ever before [and] more consumers will be able to buy fresh fish,” Johnson said.