Photo: RetailWire
Whole Paycheck it is. Despite Amazon.com’s publicity push to promote price cuts at Whole Foods, the chain remains the highest price grocer in the land, according to a new study by Bank of America Merrill Lynch (BOA).
The study, which included the round of price cuts announced on April 3rd that the grocer claimed included deeper discounts and double the number of exclusive deals for Prime members, doesn’t appear to have moved the needle on the chain’s pricing competitiveness compared to other grocers.
BOA’s research included 10 pricing studies in eight different metropolitan areas around the country over the past year. The last of these took place after Whole Foods announced its latest price cuts.
“In Philadelphia, Whole Foods’ basket was still priced at a +39 percent premium to Walmart (the grocer with the lowest overall average prices). Produce [was] still at a +25 percent basket premium to Walmart, and center-of-store items at a +58 percent premium to Walmart,” BOA analyst Robert Ohmes told CNBC.
Whole Foods’ premium to Walmart was actually one percentage point higher than BOA’s pricing studies over the past three to four years. While comparing Whole Foods prices to Walmart’s may seem unfair on the face of it, consider that Sprouts Farmers Market, a growing competitor in a similar niche to Whole Foods, had an average premium of eight percent to Walmart’s prices.
Most of the price cuts by Whole Foods were in produce, according to the research, with fewer deals to be found in other parts of its stores.
The BOA research supports findings by others that the hoopla around price cuts at Whole Foods didn’t add up to big savings for the chain’s customers. Last fall, a Gordon Haskett market basket study of 108 items sold by Whole Foods found that prices at the chain were only 0.8 percent lower a year following its acquisition by Amazon. Prime members, who were supposed to benefit most from Amazon’s ownership, only saved an additional $1.54 on a basket of over $400 when compared to non-members.
- Whole Foods still has highest prices among grocers despite April cuts, says Bank of America – CNBC
- Why can’t Amazon convert Prime shoppers into Whole Foods shoppers? – RetailWire
- Again, Amazon attempts to shed Whole Foods’ high price image – RetailWire
- Analyst: Whole Foods’ lower price claims are mostly ‘noise’ – RetailWire