One year after acquiring Whole Foods for $13.7 billion, Amazon has yet to become the disruptive force many grocery companies have feared, according industry observers. The e-tailer has made selective price cuts and provided enticing discounts for Prime members, but Whole Foods stores still only claim a small percentage of U.S. grocery sales, and AmazonFresh, the company’s grocery delivery service, has been scaled back.
Amazon’s main strategy with the chain has been to leverage its popular Prime service, according to The Wall Street Journal. Members can now get discounts on select products as well as free two-hour delivery in a growing number of stores. These integrations have driven traffic increases, and sales are up 3% year-over-year since last August, according to Second Measure data cited by the Journal. Meanwhile, Field Agent finds that more than 80% of Prime members that shop Whole Foods intend to do so more often.
At the same time, culture clashes between Amazon and Whole Foods could signal further changes down the road. Reports have detailed the exodus of top Whole Foods executives from the company as well as disagreements over product standards. CEO John Mackey now shares power with a select group of Amazon executives that are implementing the company’s broader vision into Whole Foods, CNBC reports.