Whole Foods may still have high in-store prices, but the grocery retailer is beating Kroger when it comes to grocery delivery in Kroger’s home town of Cincinnati, according to Supermarket News. A report from Barclays Capital found a $45 to $50 basket from Whole Foods purchased through Amazon Prime Now costs 2% to 7% less than the same food ordered from Kroger through Instacart.
The price check didn’t take into account the $99 annual membership fee for Amazon Prime, as the large number of customers in the U.S. (a reported 75 million) means most shoppers wouldn’t view the cost as an incremental price, according to Barclays.
Even a slight e-Commerce edge could be valuable for Whole Foods, as 70% of shopper are expected to purchase groceries online in the next five to seven years, according to the Digitally Engaged Food Shopper report from Nielsen and FMI.
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Kroger still has an edge in-store, beating out Whole Foods prices by an average of 14%. The premium charged at Whole Foods varied by department and product:
- Fresh produce (+29%);
- Dairy (+17%);
- Proteins (+5%);
- Frozen food (+18%); and
- Other center store (+13%).
The price gap was smaller than Barclays expected, and was further narrowed to an average of 3% for nonfood items. Amazon could potentially use its massive purchasing power with these items to “reinvest” synergies into lower food prices, according to Barclays.
A February 2018 price comparison found the price of a 25-item basket had fallen 6% in the six months since Amazon acquired Whole Foods, according to The Austin American-Statesman. Only one item in the study saw a price increase, though several didn’t see any change.
Prime customers in Austin may see even greater savings in the near future: Whole Foods has tested marketing material promoting a 10% discount for members of the program, according to CNBC. However, the signage is still in its trial stage, and a Whole Foods spokesperson said the grocery retailer isn’t testing the offer at any of its stores.
A survey of 400 Amazon Prime members in the Cincinnati and Dallas markets found approximately 33% of shoppers in both markets believe prices at Whole Foods have come down since the retailer was acquired by Amazon, according to Barclays. The same proportion of shoppers say they now visit Whole Foods more often, and the trend is even stronger among younger shoppers.
