goodbye whole foods prices

Episode 30: Amazon Flips the Tables on Whole Foods’ Prices

Did you know we will be at Shop.org in LA this September 25-27? We will be recording live! Come see us. If you haven’t yet registered, be sure to use code ‘BRICK10’ to get 10% off your registration.


Game On For Amazon & Whole Foods

The $13.7 billion acquisition closes on Monday. Not even a day after approval by the FTC, news about the future of Whole Foods is announced.

Price drops

We’re determined to make healthy and organic food affordable for everyone. Everybody should be able to eat Whole Foods Market quality – we will lower prices without compromising Whole Foods Market’s long-held commitment to the highest standards,” said Jeff Wilke, CEO of Amazon Worldwide Consumer in a statement. “To get started, we’re going to lower prices beginning Monday on a selection of best-selling grocery staples, including Whole Trade organic bananas, responsibly-farmed salmon, organic large brown eggs, animal-welfare-rated 85% lean ground beef, and more.

Amazon Prime to become the primary loyalty program (in the future)

All grocers and cost-conscious stores should be on alert – Amazon is going up against everyone from Kroger to Walmart and Target and of course, the last remaining independent grocers.

https://www.recode.net/2017/8/24/16198716/amazon-whole-foods-lower-prices-prime-discounts-benefits

https://www.nytimes.com/2017/08/23/technology/google-walmart-e-commerce-partnership.html

https://www.nytimes.com/2017/08/24/technology/whole-foods-amazon-lower-prices-prime.html?smid=nytcore-iphone-share&smprod=nytcore-iphone

It’s a Perfect storm for retail, says Dicks Sporting Goods CEO

  • Not many retail CEOs have publicly recognized retail in disarray. CEO Edward Stack did so this month on an investor call.
  • This comes on the heel of news earlier this month that retailers have shuttered 6300+ stores this year so far which includes retailers like JC Penney, EMS, Gymboree, Rue 21.

 

From the article:
Many companies are hoping to win over customers with dirt-cheap prices and what Stack called “irrational” and “unpredictable” promotions.

Dick’s has doubled down on attracting budget hunters and debuted a “best price guarantee” initiative in July. Now, if customers find an item being sold at a lower price — either online or at another retailer — Dick’s has promised to match the best price available.

> Dick’s shares plunged 19% before the market opened on Tuesday, after second-quarter profits and sales missed analysts’ expectations. The company reported net sales of $2.16 billion and 0.1% growth in comparable store sales at locations open for at least a year.

http://www.businessinsider.com/retail-panic-mode-says-dicks-ceo-2017-8http://www.businessinsider.com/list-of-stores-closing-2017-8

Foot Locker’s Nike Dilemma

Last year 68% of the sneakers they sold were Nike. This has been good for them so far until this year.

The company reported earnings that sorely disappointed investors today (Aug. 18), including a 6% fall in sales at stores that have been open at least a year. The results prompted a drop of nearly 25% in its share price.

In a statement (pdf), CEO Richard Johnson pointed the finger at sneaker brands, citing “the limited availability of innovative new products” as part of the reason. He could have added to that his company’s reliance on Nike, which hasn’t been delivering on the main sneaker style consumers want.

Meanwhile, it remains to be seen how big a threat Amazon is. Adidas already sells through the site, and Nike has recently inked its own deal to sell through Amazon, though it may not have big consequences for Foot Locker. Nike products were already all over the site, and Nike will probably sell more moderately priced products there, whereas Foot Locker is focused on premium sneakers. Johnson said on a call with investors that he doesn’t see Amazon as an imminent threat.

Overall, sales at athletic-specialty and sporting-goods stores were down in the quarter, according to NPD, not just at Foot Locker. The tough news for Foot Locker is that these trends aren’t changing course. Johnson said Foot Locker expects sales at stores open at least a year to be down 3% to 4% over the rest of 2017.

Foot Locker has a Nike problem

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