Doreen’s Deals
How Whole Foods’ new prices stack up.
When Amazon slashed prices at Whole Foods Market on Monday after completing a speedy $13.7 billion acquisition, analysts hastily began making burial arrangements for the grocery industry.
Amazon, that pesky Internet company whose goal is to buy, kill, own and sell everything on the planet, made a bold first move by cutting prices on some organic staples, such as apples, eggs, salmon, tilapia, beef, chicken, baby kale (of course!) and almond butter.
It also is offering Whole Foods’ 365 Everyday store brands for delivery, set up lockers in some stores for pickups and returns of Amazon goods, and vowed to keep lowering prices as the two companies integrate. Special instore perks for Amazon Prime members are coming soon, too.
Amazon founder and CEO Jeff Bezos is wasting no time on his new pet project: Disrupting the $600 billion grocery industry.
Grocers are terrified, bracing for blistering competition and complete industry upheaval, one analyst told the Washington Post, which Bezos also owns.
Whole Foods’ ambitious mission is to bring affordable, organic food to the masses while shedding its unflattering “Whole Paycheck” nickname.
For the moment, I’ll call it “85 Percent Paycheck.” New prices average about 15 percent less, according a New York Times story that compared receipts on identical items before and after the takeover.
That inspired me to go on a Doreen’s Deals shopping mission to conduct my own price comparisons to see how the new Whole Foods stacks up to other grocery stores.
I visited Wal-Mart, which is Amazon’s only true competitor, Trader Joe’s, Publix, Aldi and The Fresh Market. On my list: Store brand organic bananas, apples, eggs, butter, milk, chicken and salmon. I added wine as a bonus, because, well, you know how I love a good, cheap bottle.
I must confess, I knew which store was is going to win my cheap challenge before I left the house. But, perhaps you’ll find the winner surprising.
My first stop was Whole Foods in Fort Lauderdale, where those eight items came to $32.12.
Now, if you guessed Wal-Mart as the winner, you’d be wrong. It was Aldi. The discount grocer’s total was $24.77, a whopping 23 percent less than Whole Foods. Trader Joe’s came in second at $28.13, closely followed by WalMart at $28.29. Publix ranked fifth at $40.38 and The Fresh Market was last at $44.59. That
means 85 Percent Paycheck came in fourth. To see the price comparison chart, turn to page 3D.
Whole Foods edging Publix was surprising to me.
But let’s get real. It’s one thing to drop ridiculously inflated prices to attract new customers, but it’s another if those lower prices aren’t anywhere near the best in town. As my test showed, you can get wholesome food at much cheaper prices.
Lucky for us penny pinchers, South Florida is grocery store heaven. We have lots of great local and national chains to choose from (I stopped counting at 25) where we can cherry-pick sales each week.
Honestly, Whole Foods is not on my list. Ever. (OK, occasionally I go for Three Wishes wine. At $2.99 a bottle, its the best deal in the store.) To be fair, the chain does offer high quality hard-tofind products that some are willing to pay a premium for. I’m just not one of them.
Aldi is now my favorite grocery chain, and its store brands continue to exceed my expectations. Its prices are so low, I no longer regularly shop at my beloved Publix. Now I only go for BOGOs. I also regularly visit Trader Joe’s for specialty items and wine (organic Green Fin Pinot Noir is $5).
Amazon must scale a mountain before last rites are given to the grocery industry. Wal-Mart has about 6,300 stores and is deadly serious about integrating its online and brick-and-mortar operations to compete with and beat Amazon. It also will offer deliveries through Google Express (which is now free) starting in September.
Global discounter Aldi is the one to watch, with about 10,000 stores worldwide and 1,600 in the U.S. It’s packed with customers who don’t seem to mind it’s nofrills approach because the prices are so darned low. The chain is aggressively expanding. A new store recently opened in Hollywood joining more than 30 around South Florida.
Even with Amazon’s bulging muscle behind it, Whole Foods only has 460 stores, which puts it at a serious disadvantage against Wal-Mart. Will Bezos gobble up other chains? Probably. Will it build more Whole Foods 365 Stores that sell mostly affordable store brands, similar to Aldi and Trader Joe’s? Highly likely. One is coming to Delray Beach in 2019.
Here in SoFla, privately owned Publix is king, with about 1,100 stores and its famous customer service. (Trader Joe’s has 467 locations, and The Fresh Market has 177.)
Since Amazon is determined to change our food-gathering habits with this step into physical stores, it seems to finally get that buying groceries is different than ordering Kindles and toilet paper online. No matter how convenient delivery is, most people still prefer to pick their own melons and steaks. Plus, it’s hard to imagine Whole Foods ever competing against prices at Aldi or WalMart. Quality is a factor, but most often, price is the decider.
The Great Whole Foods Experiment may stick a fork, or even a knife, into the grocery business. But for now at least, Amazon’s using a teaspoon to dig that grave.