Furthermore, almost all of Kroger's product assortment - 85% to 90%, by SunTrust's estimate - is conventional, while Whole Foods is focused on natural and organic items, the analysts said. On Thursday, Amazon announced that Amazon Prime will become Whole Foods' customer rewards program, giving Prime members "special savings and in-store benefits". The loyalty program, which has an annual fee of $99, offers a number of perks, including free two-day shipping, video streaming and discounts on recurring purchases of household goods and diapers. Coming soon, you'll be able to slash prices on organic yummies. The grocery chain, which has fought the "Whole Paycheck" reputation, had been under shareholder pressure to improve results as customers moved on and discount chains like Lidl and Aldi expanded in the U.S. Walmart has more than 4,600 stores and past year started making a multibillion-dollar investment in lowering grocery prices. Although Whole Foods remains a niche chain - Walmart and Sam's Club, by comparison, have 10 times as many stores- analysts say an Amazon-backed grocer could have broad implications on pricing and profits.
"There was a lot of speculation that Whole Foods might be left as more of an independent entity, at least in the beginning phases of the acquisition", she said.
With every new Whole Foods customer, Amazon will expand its core business, which is based around the Amazon Prime membership.
Beyond the impact in the grocery area, Nick McLean, chief executive of OrderDynamics, noted the speed with which Amazon is leveraging Whole Foods store locations.
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Amazon is certainly a new threat to the grocery industry now that it has all of Whole Foods' 460 stores under its belt, but its online retail scale is still its best asset. "But with Amazon lowering Whole Foods' prices, you could get Whole Foods in towns where you don't traditionally see them", supermarket analyst David J. Livingston said.
Wilke said Amazon will "continuously lower [Whole Foods'] prices as we invent together".
"We feel great about our position with our network of stores around the country and fast growing e-commerce and online grocery businesses, " said Randy Hargrove, a spokesman for Walmart.
Those arguments will probably not assuage a growing chorus of Amazon critics who believe it is developing too powerful a grip on retail spending, at least on the internet. The six largest food retailers, which had already taken a hit after the Whole Foods acquisition was announced in June, lost roughly $12 billion in value after Thursday's announcement about the company's intention to lower prices.