Amazon is popularly known for acquiring businesses specializing in a wide range of niches. So, does Amazon own Whole Foods? Keep reading to learn more about Amazon and Whole Foods.
Whole Foods is one of the largest and most popular chain of supermarkets known for selling organic and all-natural products. With the ban on artificial preservatives and flavors alongside its strict animal welfare standard, Whole Foods revolutionized the grocery industry.
Since Amazon owns a large number of top companies, including Goodreads, Ring, Audible, and Abebooks, you may be wondering whether it also owns Whole Foods.
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Does Amazon Own Whole Foods?
Yes, Amazon owns Whole Foods. Amazon acquired Whole Foods in 2017 for $13.7 billion to incentivize people to upgrade to Amazon Prime membership. Amazon prime members would enjoy more benefits which included Amazon’s grocery delivery service. The acquisition by Amazon not only lowered the prices of Whole Foods but also allowed Amazon to significantly improve its Fresh stores.
When Did Amazon Buy Whole Foods?
Amazon closed its $13.7 billion purchase of Whole Foods in 2017, making it the largest acquisition by the e-commerce giant. Whole Foods started in 1978 as an independent market and expanded rapidly, opening a large number of store locations. Even though Whole Foods was one of the largest companies, the demand for organic, natural food created a huge problem.
It started getting beaten by the competition as more customers chose to buy organic, natural foods from its competitors. This forced it to close down a number of its stores due to the struggle. Therefore, on April 2017, Amazon purchased Whole Foods, which caused its stock to rise exponentially, consequently increasing its popularity and financial growth. Since Amazon's acquisition of Whole Foods, Amazon has made many changes, including better discounts and grocery delivery.
Why Did Amazon Buy Whole Foods?
Amazon purchased Whole Foods as a strategic move to encourage people to sign up for Amazon Prime memberships in exchange for discounts on their groceries. By acquiring Whole Foods, Amazon would encourage its customers to join its powerful loyalty program, which in turn meant more profits and an increased customer base.
They would place grocery orders and receive benefits such as free delivery and prioritized orders. However, there is more to that. Amazon also bought Whole Foods to learn more about the world of groceries and how they are financed, organized and managed. They would then use that knowledge to launch a more successful grocery chain.
This is seen by the launch of Amazon Fresh grocery stores, which are popping up around the country. Whole Foods had expanded rapidly, operating hundreds of grocery stores across the country. Therefore, acquiring Whole Foods meant more fulfillment centers which meant quicker deliveries. It also bolstered its selection of grocery items. Therefore, adding Whole Food to its services gave Amazon a competitive edge against its competitors.
How Amazon Transformed Whole Foods
After buying Whole Foods, Amazon has made a lot of improvements to this specialty grocer. One of the biggest changes has been the introduction of Prime membership. Previously, Whole Food was not known for offering discounts based on a membership model. After the acquisition by Amazon, Whole Foods now features Prime discount stickers on its produce, meat, and other items on sale.
These stickers and the new Prime Whole Foods app are quite convenient for regular shoppers looking to stock up. Amazon also included their Amazon Now grocery delivery into Whole Foods to provide home grocery delivery. This replaced the previous partnership between Whole Foods and Instacart. It also embedded checkout technology in its wide range of stores and enhanced its operations to improve service delivery.
Is Amazon Replacing Whole Foods with Amazon Fresh?
Even though Amazon acquired Whole Foods, it has continued to expand its physical presence with Amazon Fresh. Therefore, many customers think that Amazon is rebranding Whole Foods into Amazon Fresh.
This may be because both Whole Foods and Amazon Fresh offer the Amazon Now grocery delivery service, among a wide range of special benefits for Amazon Prime members. However, that’s not the case. Even though there are a few similarities between the two stores, Amazon does not plan on replacing Whole Foods with Amazon Fresh.
Amazon Fresh Vs. Amazon Whole Foods
While Amazon owns both Amazon Fresh and Whole Foods, they are different and, at the same time, comparable.
Amazon Fresh and Whole Foods share a wide range of similarities in their services and connection to Amazon Prime. Both Amazon Fresh and Whole Food customers have access to Amazon Now grocery delivery which allows them to have their orders delivered to their doorstep.
Since they both share Amazon as their parent company, they are both available online to Amazon customers. Amazon Prime members enjoy quick delivery services among other Prime membership services, whether they shop on Amazon Fresh or Whole Foods.
Whole Foods and Amazon Fresh are considered separate entities with a few differences. The main difference between these two grocery stores is the type of groceries they offer and the price points. Whole Foods mainly targets health-conscious customers since it sells natural, organic food. On the other hand, Amazon Fresh offers everyday grocery items with a wide assortment.
Another difference is that Whole Foods mainly focuses on the higher-income customer even though it includes some of the brands found on Amazon Fresh. On Amazon Fresh, you’ll find a wide selection of national brands, private labels, and store-made products at a much lower price.
On the other hand, Whole Foods offers organic products at a much higher price point. In addition, Amazon Fresh stores have high-tech equipment to give you a more personalized shopping experience. Amazon also offers customers more additional benefits when they shop at Amazon Fresh.
Groceries make up the largest part of most people’s spending. That’s why Amazon bought Whole Foods in 2017 at $13.7 billion. This was a move towards dominating this niche and increasing its Prime members. While Amazon owns Whole Foods, it has not stopped in its move to grow a massive nationwide chain of Amazon Fresh stores. Depending on their desired products and budget, grocery shoppers can choose to shop on Amazon Fresh or Whole Foods. Whole Foods is a good place for shoppers who focus on purchasing organic produce. It also offers Prime discounts on its produce, meat, and other food items.