One of the many criticisms people have had of Whole Foods over the years is the high price tags they place on all of their food. In fact, many people refer to the store as “Whole Paycheck” in reference to their infamously high prices. All that changed when Amazon acquired the chain. They slashed prices on groceries by as much as 43 percent on their first day calling the shots.
The price cuts were applied to many grocery staples. For example, the price of whole trade bananas fell from 79 cents to 49 cents per pound, while organic Fuji apples saw a price drop from $3.49 to $1.99 per pound. Signs on the food listed its old price, the new price and a simple promise: “More to come.”
The $800-billion-per-year supermarket industry was shaken up by the news that Amazon had purchased Whole Foods for $13.7 billion, and Amazon’s price cuts at the store now have price-minded competitors like Costco and Wal-Mart holding their breath to see if Amazon will take their customers.
However, it’s other health food stores that could end up suffering the most. As Barclays Capital Inc. Analyst Karen Short told Bloomberg, “The survival of the fittest has begun.” If big retailers like Wal-Mart, Kroger, and Costco struggle to keep up, what hope do smaller health stores have of remaining competitive in this sector?
Market’s reaction shows that many believe Amazon is behaving like a monopoly
The market clearly believes Amazon is edging toward a monopoly, with share prices bucking the usual trend when a company makes such a big purchase by rising instead of falling. As The Atlantic points out, this points to a belief among investors that Amazon is squashing competition not only in retail but in the economy at large.
Lina Khan told The Atlantic that many consumers might feel like Amazon is good for them given their low prices, but it’s important to think about where all this could be headed. She added that while America likes to think it has an open and competitive economy, Amazon’s growing share is akin to centralization.
She said: “Owning your own business used to be a way for Americans to build assets and pass on wealth inter-generationally. But if you look at any sector where Amazon is a dominant player — you’d be somewhat crazy to enter there.”
Despite lower prices, consumers will ultimately lose
This is indeed awful news for consumers if Amazon’s track record when it comes to health food is anything to go by. Whole Foods was already dealing with heavy metals in its products before the acquisition, so it won’t be too surprising to find foods with GMOs and toxins on Whole Foods’ shelves for the foreseeable future.
In addition, many people are doubting Whole Foods will still live up to its promise to label all foods that contain GMOs in their stores by 2018 under Jeff Bezos’s reign; it’s worth noting that Bezos also owns the Washington Post, which has close ties with Monsantoand other GMO manufacturers.
Until now, the questionable ingredients and practices of Whole Foods have been exasperating but nothing to lose sleep over; after all, we can all simply choose to shop elsewhere. Many people have been letting their money do the talking by patronizing smaller, more ethical grocers as more information comes to light about the products Whole Foods sells. However, once they’ve driven all the competition out of business, where will people be able to turn for groceries that are truly natural and organic?