Whole Foods Price Cuts Send Shares Of Kroger And Sprouts Sliding
Amazon.com Inc.’s price cuts at Whole Foods, a key part of its strategy for the upscale grocer, are rocking its supermarket rivals.
Shares of Kroger Co. and Sprouts Farmers Market Inc. fell on Wednesday after Amazon announced that it was lowering prices on more grocery items and holiday staples. The deals include deeper discounts on antibiotic-free turkeys as Thanksgiving approaches.
More Price Cuts
Whole Foods also signaled that markdowns will get more aggressive as it adopts Amazon’s Prime subscription platform. The popularity of Prime threatens to give the grocer a weapon it can wield against other chains, which already have seen their shares pummeled this year.
Kroger fell as much as 3.5 percent to $21.25 in New York trading on Wednesday, marking the biggest intraday decline in a month. Sprouts tumbled as much as 3 percent to $19.98.
Even after its acquisition of Whole Foods, Amazon remains a small grocery player. But the takeover -- and its potential to push more customers to buy food online -- has fueled pessimism on Wall Street about traditional grocers like Kroger, the meal-kit service Blue Apron Holdings Inc., and even General Mills Inc. and Campbell Soup Co.
The latest price cuts are a “sneak peek” of the savings and in-store benefits that Whole Foods will offer once it begins using Prime as its loyalty program, the grocer said.
“We’re just getting started,” Whole Foods Chief Executive Officer John Mackey said in a statement. “In the few months we’ve been working together, our partnership has proven to be a great fit.”