Prime Perks: Amazon Dangles Discounts For Whole Foods Shoppers
May 16 2018 - 12:30AM
Dow Jones News
By Laura Stevens
Amazon.com Inc. is offering new discounts for Prime members
shopping at its Whole Foods grocery stores, adding another perk to
its membership program after a 20% price hike.
The online retail giant said it would knock 10% off already
discounted items and each week cut prices on other products
throughout the store. This week's deals, for example, include half
off wild-caught halibut, buy-one, get-one free 12-pack case of
sparkling water and $2.99 for a pound of organic strawberries.
The new deals are available immediately at Florida stores and
will be rolling out to its more than 460 stores nationwide this
summer. Cem Sibay, vice president of Amazon Prime, said the 10%
discount will apply to hundreds or even thousands of already
discounted items in each store, while the weekly rotation of deals
will typically number in the single digits.
"It'll be a good mix of produce, meats and seafood," he
said.
The discounts come as analysts estimate Prime's growth rate may
be slowing. Amazon for the first time last month revealed it has
over 100 million Prime members world-wide. Still, analysts think
the company has largely saturated wealthier U.S. households,
triggering the company to look for additional growth for the
program elsewhere.
Adding more discounts at Whole Foods could make the Prime
program worthwhile for some shoppers and keep them in the fold, as
well as draw in some of the roughly 40% of shoppers who aren't yet
members, according to Morgan Stanley. Analysts at the bank say
grocery discounts "can go a long way toward justifying Prime
membership...even at $120 a year."
Amazon increased the annual price of Prime last month for only
the second time since 1995. The program, which includes unlimited
two-day shipping and video content, started off at $75 annually in
2005. Executives attributed this year's price hike to the cost of
delivering the program as it adds to the offerings.
Prime consists of a bundle of benefits, Mr. Sibay said. "So no
one benefit really drives a price increase."
Amazon also recently added a new option to get in-car delivery
for Prime members and began offering a Prime Book Box that delivers
a curated subscription of children's books at a discount.
Amazon has also widened the scope of Prime to low-income
consumers by adding programs costing $5.99 a month for those who
obtain government assistance with cards typically used for the
food-stamp program and Medicaid assistance.
To get the new Whole Foods discounts, Amazon said Prime
customers can sign in to either scan a bar code generated by the
grocer's app or enter their phone number to qualify for the
discounts. Prime customers with Amazon reward credit cards qualify
for an additional 5% off.
The Whole Foods Prime discounts are the latest in a round of
changes announced by Amazon since its August acquisition of the
grocery chain. It has also added one- and two-hour delivery in some
markets, slashed some prices, added lockers to most stores and
introduced Whole Foods' private label foods to its own website.
Write to Laura Stevens at laura.stevens@wsj.com
(END) Dow Jones Newswires
May 16, 2018 00:15 ET (04:15 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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