business news in context, analysis with attitude

by Kate McMahon

If my Whole Foods shopping list included wild sea scallops, Sumo citrus, ground bison, candles, Justin’s Nut Butter Cups and a plastic-wrapped turkey and Swiss cheese sandwich, I would be one happy Amazon Prime customer tallying my much-touted “member discount” at checkout.

But alas, I was in the market for more mundane groceries: eggs, milk, orange juice, butter, ground beef, asparagus, a rotisserie chicken, Arborio rice and strawberries.

And so, one week into Whole Foods’ promise to cut prices on “hundreds of items” and reward Prime members who fork over $119 a year for membership, only the strawberries were on sale.

I saved two bucks.

Amazon announced the effort last week, heralded in stores by light blue signage for “Member Deals” and posters reading “Hey Prime members, you’re gonna need a bigger cart.” These follow the bright yellow “sale” signs introduced during the last price cut, including an additional 10% off those items for Prime members who present their Whole Foods app barcode at checkout. (Oh yes, and there was an under-the-radar price increase in between “cuts.”)

At first glance, the light blue “Members Deal” sign advertising organic strawberries reduced from $5.99 to $2.99 a pound looked promising. Then the one-pound container rang up at $4.99 reduced to $2.99 for a savings of $2 not $3. (Did Whole Foods mark them up only to mark them down and make the cut look bigger? That’s certainly the implication.) And then I noticed that strawberries were on sale at just about every supermarket in town.

I wasn’t the only one underwhelmed. Many Prime members vented on Twitter with posts such as:

“They need to do better. My Prime discount was $2.21 on a $252 shop” and “Well, thank God Amazon bought Whole Foods, otherwise I never would have been about to afford it without my MASSIVE 80 cent discount (eye roll emoji).”

The New York Times enlisted the basket approach, purchasing the same groceries the day before and the day after the price cut. “The result: We saved a nickel.”

Admittedly, there were significant savings on the wild sea scallops (from $22.99 to $12.99 per pound), the Sumo citrus ($3.99 to $2.49 per pound), ground bison ($9.99 to $7.99) and 25% and 35% off of candles and Justin’s Nut Butter Cups, respectively. There was a $2 savings on the $6.99 pre-made sandwich, just steps away from the deli.

But Whole Foods did not deliver on its pledge to slash prices on seasonal produce and premium meats, and trust me, I looked for bargains. In fact, the very seasonal organic asparagus was $4.99 a pound. The price at local supermarkets was 60% lower.

Which begs the question: are these real savings for loyal shoppers or just a vehicle to drive Prime memberships? In fact, new customers who try Prime can get $10 off of a $20 in-store order through the end of April.

If Amazon truly wants to make a Prime membership “irreplaceable” and forge a strong connection with Whole Foods shoppers, this isn’t enough. Its Twitter feed was filled with customers grousing that they didn’t even bother to open the Whole Foods app at checkout any more, since there was so rarely any benefit.

Furthermore, it seems to me that there are only so many times that Whole Foods can go to this well. At some point - and we may already have reached it - press releases, advertisements and in-store signage about discounts will fall on deaf ears.

Let’s face it, Whole Foods will always be more expensive than its mainstream competitors, and its loyalists expect quality. In this competitive category, I would like to see a real loyalty program with quantifiable discounts based on Prime shoppers’ history. Sea scallops, bison and Sumo citrus aren’t doing it for me.

It may be that Amazon - seeking to drive more value from its Whole Foods ownership to other parts of its business (like Prime membership) - could be slowly eroding Whole Foods’ value proposition. It is, at least, something to consider.

Comments? Send me an email at kate@mnb.grocerywebsite.com .


'; -->
KC's View: