Whole Foods to expand nationwide to drive Prime Now growth
Amazon.com is reportedly planning a nationwide expansion of Whole Foods with the support of — and in support of — its two-hour Prime Now grocery delivery service.
Spreading more Whole Foods locations deeper into the suburbs will expand the range of Prime Now, which offers free two-hour and $7.99 one-hour delivery to Prime members for orders over $35 from Whole Foods. In February 2018, the service rolled out in select markets and in October expanded to 63 cities.
In early August, Prime Now grocery pickup was launched from Whole Foods locations. Shoppers can pick up their orders for $4.99 within 30 minutes or for free in an hour on orders over $35. The pickup service is now available in nearly 30 cities.
According The Wall Street Journal, Amazon plans to expand Prime Now across its approximately 475 Whole Foods’ doors and ramp up the grocery chain’s expansion. Amazon representatives have visited remote areas, including southern Utah and Wyoming, seeking locations around 45,000 square feet, slightly larger than the average Whole Foods store to accommodate delivery and pickup of Amazon orders, according to the report.
In its holiday-selling releases, Amazon announced that it had delivered more turkeys than ever through Prime Now and AmazonFresh. It also noted that the last Prime Now delivery was made on Christmas Eve at 11:30 pm in Berkeley, CA.
For Whole Foods, the move shifts the chain back into expansion mode from a slow growth and cost-cutting phase prior to Amazon’s purchase in August 2017. The new growth first strategy is expected to help morale at Whole Foods that has been hurt by the layoffs, belt tightening and efficiency-seeking maneuvers.
An analysis by data firm Numerator that came out last September found that Amazon’s move to lower prices had increased spending frequency at Whole Foods by Prime members. Access to in-store Whole Foods discounts was also found to be the leading reason non-Prime members were interested in becoming members.
The expansion of Whole Foods and Prime Now also comes as national, regional and local food retailers are all continuing to invest aggressively in rolling out grocery delivery and pickup.
- Amazon Plans to Add Whole Foods Stores – The Wall Street Journal
- Amazon reportedly plans to build new Whole Foods Market stores – CNET
- Amazon is reportedly bringing Whole Foods to US suburbs with Prime Now delivery – The Verge
- Amazon Expands Grocery Delivery And Pickup, Now Serving Prime Members in More Than 60 Cities – Amazon.com/Business Wire
- Amazon Begins Grocery Delivery from Whole Foods Market with Plans for Expansion in 2018 – Whole Foods Market
- Amazon rolls out Prime Now deliveries from Whole Foods – RetailWire
- Amazon’s Grocery Push Keeps Stumbling After Whole Foods Purchase – Bloomberg
- Amazon Customers Made This Holiday Season Record-Breaking with More Items Ordered Worldwide Than Ever Before – Amazon.com
- Whole Foods + Amazon: One Year In – Numerator
DISCUSSION QUESTIONS: How aggressively should Amazon expand Whole Foods to support Prime Now’s growth goals? What will this development mean for the grocery industry and competitors to Amazon and Whole Foods?