For the third time since taking control of Whole Foods in August, Amazon.com Inc.(Nasdaq: AMZN) is lowering prices at Whole Foods stores. The latest price cuts include those on turkeys just ahead of the Thanksgiving holiday.
In a statement, Whole Foods CEO John Mackey said the latest round of price cuts are part of Amazon’s ongoing integration into the grocery business.
“We’ll continue to work closely together to ensure we’re consistently surprising and delighting our customers while moving toward our goal of reaching more people with Whole Foods Market’s high-quality, natural and organic food,” Mackey said.
For all customers, Whole Foods will be offering organic turkeys for $3.49 per pound and non-organic turkeys for $2.49 per pound. Amazon Prime members will pay $2.99 per pound and $1.99 per pound for organic and non-organic turkeys.
To be eligible for the reduced Prime prices, members must print a coupon for the deal from Amazon’s website.
KeyBanc analyst Edward Yruma says the price cuts make sense for Amazon.
“We are not surprised at the reduced prices for turkey items heading into the holidays, especially given ample industry supplies and historically low prices,” Yruma says. “Additionally, recent channel checks and industry sources indicate grocery retailers have lowered prices on dairy items (with some utilizing milk as a loss leader) in an effort to drive more in-store traffic.”
Grocery stocks have slumped in recent months on fears that Amazon’s entry into the space may trigger a price war and a fundamental shift from in-store to online grocery shopping.
Earlier this week, Goldman Sachs analyst Christopher Prykull said investors should be careful investing in grocery stocks at this stage.
“Online grocery is in early stages, but growing, and companies are starting to invest behind it,” Prykull said, according to CNBC.
Goldman initiated…
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