In less than two weeks, Amazon’s ownership of Whole Foods Market will officially be one and a half years old.
Since the sale closed on Aug. 28, 2017, the American-Statesman has tracked prices at the Austin-based grocer to see how Amazon’s promised cost reduction has proceeded. Prices of a 23-item basket have decreased over time. But ahead of another check set to happen this month, recent media reports indicate that Whole Foods’ prices are on the rise as Whole Foods sales growth has slowed.
The grocery chain is increasing prices on some items because of rising packaging, ingredient and transportation costs, the Wall Street Journal reported recently. Additionally, contracts Whole Foods had signed with suppliers to sell hundreds of products at lower prices expired and won’t be renewed, sending prices up. Soaps, detergents and oils are some of the most affected items, the Journal reported, with the average item’s cost increase being 66 cents.
Since Amazon purchased Whole Foods, it’s tried to erase the “Whole Paycheck” image the grocer has long carried. Many of the company’s price reductions have come via its Amazon Prime rewards system or through deals the e-commerce company has offered online.
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In an emailed response, Whole Foods spokeswoman Stephanie Ferragut said the company continues to work on its price structure.
“Our teams are working hard to lower costs and invest the savings in both lower prices for customers and new programs such as delivery of Whole Foods Market groceries via Prime Now,” Ferragut said.
The American-Statesman’s latest price check in August showed that overall prices had dropped 4.69 percent since the first check right before the sale closed in 2017. But prices had risen 4.23 percent since a check in February 2018.
Prices on popular items such as organic raspberries, ground beef and large brown eggs had remained lower since Amazon’s takeover. But Fuji apples, Whole Foods’ 365-brand organic spring mix and a gallon of 365-brand milk had increased in price.
Overall sales at Whole Foods, which had climbed since Amazon came into the picture, have also not been as strong lately.
In its fourth quarter earnings report on Jan. 31, Amazon said sales at its brick-and-mortar stores were down 3 percent year-over-year. Chief financial officer Brian Olsavsky said then in a call with investors that those sales mostly reflected Whole Foods stores.
A shorter day count in that fourth quarter when compared to the previous fourth quarter affected numbers, Olsavsky said. In addition, purchases made online by Whole Foods customers for in-store pickup, which were counted as online sales, also skewed the outcome. Without those factors, Olsavsky said, physical store sales would have increased by 6 percent.
Amazon has continued investing in Whole Foods. After only opening five new stores in 2017, Whole Foods opened about 25 new stores last year, a recent analysis by the American-Statesman found.
Total store count has almost surpassed 500, with more stores planned to open in Illinois, Georgia and other locations.
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