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Amazon plans cuts to shed Whole Foods' pricey image

By: Spencer Soper and Craig Giammona, Bloomberg News
June 19, 2017 Updated: June 19, 2017 at 2:42 pm
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In this May 3, 2017, photo, people stand outside a Whole Foods Market in Upper Saint Clair, Pa. Amazon’s planned $13.7 billion acquisition of Whole Foods signals a massive bet that people will opt more for the convenience of online orders and delivery or in-store pickup, putting even more pressure on the already highly competitive industry. (AP Photo/Gene J. Puskar).

When Amazon.com Inc. completes its acquisition of Whole Foods Market Inc., Chief Executive Officer Jeff Bezos will try to keep the grocer’s reputation for premium fresh foods while cutting prices to shed its “Whole Paycheck” image.

Amazon expects to reduce headcount and change inventory to lower prices and make Whole Foods competitive with Wal-Mart Stores Inc. and other big-box retailers, according to a person with knowledge of the company’s grocery plans. That included potentially using technology to eliminate cashiers. An Amazon spokesman denied any job cuts were planned.

Amazon, known for its competitive prices, is trying to attract more low- and middle-income shoppers with its grocery push. The Seattle-based company already offers discounted Amazon Prime memberships for people receiving government assistance and is part of a pilot program to deliver groceries to food-stamp recipients.

Whole Foods has already been reducing prices to try to turn around its worst sales slump since going public in 1992. It has four "365 by Whole Foods Market” stores that are cheaper to build and operate than a traditional location and offer lower-priced items aimed at younger shoppers.

Read the full story at Bloomberg News.

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