Whole Foods a grocery store owned by Amazon is still considered the most expensive in the United States, despite slashing its prices in April.
It is notable that the retailer slashed prices of the majority of its products in April but its prices have still remained high.
On Tuesday, Bank of America Merrill Lynch reported that Whole Foods’ price discount will likely not affect prices at Walmart, which ostensibly has the lowest prices, followed closely by Kroger at 7%.
The average premium for Sprouts Farmers Market was 8 percent. This year’s average premium for Whole Foods was comparatively higher from its previous 4 years, closing at 34 percent, higher than Walmart’s.
Robert Ohmes a Bank of America analyst observed that the price study conducted in Philadelphia showed that the basket of Whole Foods was priced at above 39 percent compared to Walmart. It is still the center-of-store with 58 percent in comparison to its close competitor, Walmart.
According to the analyst, Whole Foods’s discount went beyond the Amazon prime membership. Their main aim was to check on produce since the products found in the store center were not that competitive.
As per the study, the organic produce price premium is continuously narrowed vis-a-vis the conventional produce. In their explanation for this trend, they said that competition was the main motivation. Walmart has since expanded its organic offerings and also Target hence tightening the market competition.
The U.S. groceries have kept up with the stiff competition on prices and technology even when the majority of buyers have opted for Amazon.
On Tuesday, Coresight Research released a report showing that the e-commerce sector was behind the 2.2 percent food and beverages sales witnessed in the U.S. in 2018. They project an increase in online market share this year to about 2.7 percent. The competition has not spared the retailers in delivery time. Amazon last month announced that they will do free delivery to its customers within a day. Walmart has followed suit by announcing on Tuesday that it intends to begin next-day delivery to serve over 200,000 products on its website.