Amazon isn’t just a retailer; it’s also a tech company. And thanks to these digital abilities, Amazon has its pricing down to a science. In 2018, Investopedia wrote that product prices “typically change every 10 minutes as big data is updated and analyzed.” Who hasn’t tossed something in their virtual cart only to come back later to find the price had been tweaked? All these changes are part of the company’s price optimization strategy — and though it can save you money, the point is quite the opposite: to maximize profits.
Obviously, it’s far harder to constantly tweak tags in a physical store like Whole Foods, but recent reports seem to show that Amazon has taken a similar approach with pricing at the grocer. Yes, since its acquisition, Whole Foods has continued to regularly announce rounds of price cuts, but how long these cuts last for or whether other prices have gone up isn’t easy to track.
But the analysist at Gordon Haskett Research Advisors have — focusing in on one specific store in Princeton, New Jersey, and comparing prices nine times since Amazon took control — according to Bloomberg. Their findings: A basket of 106 common products that cost $404.08 in August 2017 now costs Prime members $394.10. That’s a savings of just $10 or about 2.5 percent. Meanwhile, if you aren’t a Prime member, you’d only save about $8, the report says — a stunningly low difference seeing as Amazon has been aggressively pushing the benefits of Prime membership for Whole Foods shoppers. (Of course, there are plenty of other benefits to Prime, but… $2?)
“Many of the aggressive price actions from Whole Foods have been more bark than bite,” analyst Chuck Grom told Bloomberg.
And indeed, data strategies would seem to be playing a significant role: Gordon Haskett Research Advisors apparently found that produce and dairy—two common types of products people might drop into Whole Foods for—had seen their prices decrease: about 16 percent and 5 percent respectively. But other types of products have seen prices increase, like snacks, which is likely more of an impulse buy.
To be fair, you can’t necessarily blame Amazon for these tactics. First, they’re a business, not a charity. And second, fluctuating prices aren’t just an Amazon phenomenon; it’s common industry practice. So the larger takeaway is that, in the end and as always, it’s buyer beware.
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