Amazon says Whole Foods deal to close Monday, vows lower prices

August 25, 2017 | 08:57

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NEW YORK: Amazon announced on Thursday (Aug 24) that its takeover of Whole Foods Market will close next week, as it vowed to cut grocery prices and fully integrate the chain into its retail empire.

Amazon announced that its takeover of Whole Foods Market would close next week as it plans to integrate the chain into its retail empire. (AFP/SAUL LOEB)

The US$13.7 billion acquisition, announced in June, will close on Monday, Amazon and Whole Foods said in a joint statement one day after Whole Foods shareholders backed the deal and US antitrust officials gave it the green light.

Once completed, Amazon plans to broadly integrate Whole Foods to its subscription-based "Prime" programme, which already grants customers free two-day shipping, access to original programming and other perks. It will also cut prices on select goods starting on Monday.

The companies also emphasised their determination to cut prices at a franchise that for years has had the ironic moniker of "Whole Paycheck" for its ability to induce sticker shock.

"We're determined to make healthy and organic food affordable for everyone," said Jeff Wilke, chief executive of Amazon Worldwide Customer.

"Everybody should be able to eat Whole Foods Market quality - we will lower prices without compromising Whole Foods Market's long-held commitment to the highest standards."

Although Whole Foods accounts for only an estimated 1.2 per cent of the US food and grocery market, the deal has been seen as a disruptor within the food shopping business, accelerating competition for home-delivered groceries.

On Wednesday, the world's biggest retailer, Wal-Mart Stores and technology giant Google announced they were teaming up in a grocery delivery venture that was widely seen as a response to Amazon.

Amazon's strategy for Whole Foods includes special discounts for members of Prime, a customer rewards program at Whole Foods for Prime customers and the installation of Amazon Lockers in some stores, permitting customers to pick or send returns to Amazon while they buy food.

The companies announced they would cut the prices on Monday on a selection of what it described as "best selling staples," a list that included items such as lean ground beef and organic large brown eggs, as well as organic baby kale and both creamy and crunchy almond butter.