What do grocery shoppers want? Low prices, one-stop shops
Amazon made a splash right away as the new owner of Whole Foods, slashing prices Monday on baby kale, avocados and ground beef. That attracted some customers, but whether shoppers who've found cheaper alternatives will come back, or those who never visited will give Whole Foods a try, may help determine what kind of effect the blockbuster deal has on how people get their groceries.
Shoppers who talked with The Associated Press this week said what they wanted most of all is lower prices and one-stop shopping.
Stores are competing fiercely to attract them. Traditional supermarket chain Kroger stressed earlier this year that it does not plan to "lose on price.'' Target is spending billions to remodel its stores and highlight its grocery section. Newer entrants from Europe, such as discounters Aldi and Lidl, are opening more U.S. stores. And Walmart, the country's largest grocer, is making it easier for customers to order groceries online and pick them up at the store.
Some shoppers said they were concerned with Amazon's growing power, while others said the nearest Whole Foods was too far away to be a frequent stop. And while other supermarkets have added aisles of organic and natural products to mimic Whole Foods, the chain still doesn't sell some consumer favourites like Diet Coke, Bounty towels or other brands people want.
Donna Brown, a part-time administrative assistant in Austin, Texas, said the "chichi organic stuff" at Whole Foods couldn't replace her Clairol hair colour or allergy medicine.
"I'm going to gravitate to Walmart," she said.
Gail Johnson, a pharmacy technician from Cleveland, has never been to a Whole Foods and doesn't plan to, even after hearing about the price cuts.
"Organic food is real expensive, but here there's regular food," Johnson said while browsing a movie rental kiosk near the Walmart entrance. "They've got movies, liquor, beer, ice cream; anything you want."
Analysts at Citi and JPMorgan Chase don't expect the price cuts at Whole Foods to make the chain more competitive or attract more shoppers. And Amazon said the moves this week were just the beginning. It expects to lower prices on more items and will offer discounts to members of its $99-a-year Prime program. More price cuts may also help shake the grocer's "Whole Paycheck" image.
Some Whole Foods fans were worried about Amazon's growing influence in their lives.
"It's going to make me want to go to Whole Foods less because they're already a corporation, but now they're part of Amazon, which already owns so many other things," said Hillary Minor, who recently moved to Seattle, where Amazon is based. "It just seems like it's taking over."
U.S. regulators didn't have a problem with the Amazon-Whole Foods deal, giving the e-commerce giant the green light last week to acquire Whole Foods for nearly $14 billion.
Joshua Cano of Seattle said he would stick to Quality Food Centers, a supermarket chain owned by Kroger, even though he said Whole Foods had high-quality food.
"I can come here," he said, "and spend half the cost and get twice as much food."