Amazon's plan to make Whole Foods more affordable is working. According to Business Insider, the supermarket chain that was once maligned for its high prices saw a 25% increase in foot traffic after prices were slashed last month. Some cities, like Chicago, saw an even greater increase of 35%.
Food & Wine reports that Foursquare Labs Inc. looked at data in the two days after Amazon's takeover. Prices on some items were cut almost 43% and Whole Foods stated that it's committed to keeping the prices of avocados, salmon, and eggs low to keep customers coming back. Analysts say that it's still too early to tell whether or not the new pricing strategy will retain shoppers, but it's certainly not a bad sign.
"A lot of people went to see what they could see," Jennifer Bartashus, an analyst at Bloomberg Intelligence, said. "The question is if they think the prices are low enough to change their shopping behavior — it takes a very long time to change a consumer's perception of prices and value."
In addition to lowering prices, Amazon made a selection of 2,000 Whole Foods items available online. Food & Wine notes that 365, the chain's in-house label, racked up $500,000 worth of sales after just one week online.
Business Insider notes that all the attention that Whole Foods and Amazon garnered after the acquisition could have piqued shoppers' curiosity. Headlines about new lower prices may have brought in customers that never stepped into a Whole Foods before, but analysts insist that prices aren't enough to retain them. Amazon and Whole Foods are hoping that a focus on organic and locally sourced items will keep shoppers coming in.
"It can take multiple trips to truly appreciate that there’s a been a change," Bartashus said. "People went in and bought cheaper bananas, but will they really appreciate the broader efforts? That's the question."
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