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Grocery wars intensify anew as Whole Foods to cut prices on hundreds of items by 20% starting tomorrow

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Whole Foods, the high-end grocery store bought by Amazon in 2017, plans to cut prices on hundreds of items by as much as 20 per cent as of Wednesday, including at locations in Canada.

Amazon says most of the cuts will come in produce and other fresh items and will amount, on average, to about 20 per cent in savings where they are in effect.

It’s the third such round of widespread cost cutting since Amazon bought the chain in the fall of 2017.

The takeover at the time came as a bit of a surprise, since it was the marriage of two companies with vastly different strategies and markets.

Amazon started as an online bookstore and soon grew to become the largest online retailer of just about everything else by focusing on cutting costs while expanding selection and offering delivery speeds that other sellers struggled to match.

Its Amazon Prime service, where customers can get same-day delivery on millions of products for an annual fee in Canada of $79, has helped them cement customer loyalty even more.

Whole Foods, meanwhile, began as a health food store in Austin, Texas, in 1980 that steadily grew across the U.S. and then into Canada by catering to health-conscious shoppers who didn’t mind paying more for items they deemed to be healthier.

When Amazon bought the chain, many wondered what the long-term plan was, and Wednesday’s move seems to suggest the company may bring its ruthless approach to cost cutting to the bricks-and-mortar world of retail. And the company claims it can do that without sacrificing the quality that won the grocer fans in the first place.

“Whole Foods Market continues to maintain the high-quality standards that we’ve championed for nearly 40 years, and with Amazon, we will lower more prices in the future, building on the positive momentum from previous price investments,” Whole Foods co-founder and CEO John Mackey said. “We will continue to focus on both lowering prices and bringing customers the quality they trust and the innovative assortment they expect from our brand.”

‘Seismic impact’

Whole Foods has about 300 U.S. locations and 14 in Canada — mainly in and around Toronto and Vancouver, but also one location in Victoria and one in Ottawa.

Strategy adviser Mark Satov, with Satov Consultants, says it’s less likely the decision will kick off a move to turn Whole Foods into a discount grocery chain, and more likely Amazon is simply using the chain to figure out how a new business works. “They bought it to learn how to be in the food business,” he said.

“I think they’re just experimenting and marketing to draw a few more people into the store,” he added. The store’s price point is still out of reach for most Canadians, but by targeting items that people tend to benchmark prices on — things like fresh vegetables — the chain is hoping to win a few more customers for its more expensive items, too.

“Once you are inside the store, a couple of things happen,” Satov said. “You go and say the milk is $3.69 … I can afford that, and then you’ll buy the freshly ground peanut butter for $18 a tub.”

Whole Foods currently has more than a dozen locations across Canada. (Lynne Sladky/Associated Press)

But Bruce Winder, co-founder and partner at Retail Advisors Network, says the move is a much bigger deal for the hyper-competitive world of Canadian grocery.

“It’s going to cause a fairly seismic impact,” he said in an interview. While he acknowledges the Whole Foods footprint is relatively small in Canada, “it fires a shot over the bow of traditional grocery,” he said.

The move likely won’t cause a flood of people to change their grocery store, he said, but “it’s going to wake up some people to consider a switch.”

If it gets enough of them through the door — and possibly buying new Prime memberships — Winder says it’s worth it.

That’s because most people shop one or two times a week, “and if they can get that customer coming in, invite them into the ecosystem, get them to use Prime — and suddenly you’ve got a strong rewards system there that keeps the customer within the Amazon world,” he said.

And ultimately, anything that causes the rest of the industry to take a look at its own businesses is a good thing for everyone.

“The consumer wins,” Winder said.

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Record one million job losses in March: StatCan

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OTTAWA — More than one million Canadians lost their jobs in the month of March, Statistics Canada is reporting. The unemployment rate has also climbed to 7.8 per cent, up from 2.2 percentage points since February.

Canada’s national statistics agency released its monthly Labour Force Survey on Thursday, using March 15 to 21 as the sample week – a time when the government began enforcing strict guidelines around social gatherings and called on non-essential businesses to close up shop.

The first snapshot of job loss since COVID-19 began taking a toll on the Canadian economy shows 1.1 million out of work since the prior sample period and a consequent decrease in the employment rate – the lowest since April 1997. The most job losses occurred in the private sector and among people aged 15-24.

The number of people who were unemployed increased by 413,000, resulting in the largest one-month increase in Canada’s unemployment rate on record and takes the economy back to a state last seen in October, 2010.

“Almost all of the increase in unemployment was due to temporary layoffs, meaning that workers expected to return to their job within six months,” reads the findings.

The agency included three new indicators, on top of the usual criteria, to better reflect the impact of COVID-19 on employment across the country.

The survey, for example, excludes the more commonly observed reasons for absent workers — such as vacation, weather, parental leave or a strike or lockout — to better isolate the pandemic’s effect.

They looked at: people who are employed but were out of a job during the reference week, people who are employed but worked less than half their usual hours, and people who are unemployed but would like a job.

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Employee at Ottawa’s Amazon Fulfillment Centre tests positive for COVID-19

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OTTAWA — An employee who works at Amazon’s fulfillment centre on Boundary Road in Ottawa’s east-end has tested positive for COVID-19.

Amazon says it learned on April 3 that an associate tested positive for novel coronavirus and is currently in isolation. The employee last worked at the fulfillment centre on March 19.

Two employees told CTV News Ottawa that management informed all employees about the positive test in a text message over the weekend.

In a statement to CTV News Ottawa, Amazon spokesperson Jen Crowcroft wrote “we are supporting the individual who is recovering. We are following guidelines from health officials and medical experts, and are taking extreme measures to ensure the safety of employees at our site.”

The statement also says that Amazon has taken steps to further protect their employees.

“We have also implemented proactive measures at our facilities to protect employees including increased cleaning at all facilities, maintaining social distance in the FC.”

CTV News Ottawa asked Amazon about the timeline between when the company found out about the positive COVID-19 case and when employees were notified.

In a separate email to CTV News Ottawa, Crowcroft said “all associates of our Boundary Road fulfillment centre in Ottawa were notified within 24 hours of learning of the positive COVID-19 case.”

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Ottawa facing silent spring as festivals, events cancelled

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This is shaping up to be Ottawa’s silent spring — and summer’s sounding pretty bleak, too — as more and more concerts, festivals and other annual events are cancelled in the wake of measures meant to slow the spread of coronavirus.

The province has already banned gatherings of more than five people, and on Monday officials announced city parks, facilities and services will remain shut down until the end of June, nor will any event permits be issued until at least that time.

“This leaves us with no choice but to cancel the festival this year,” Ottawa Jazz Festival artistic director Petr Cancura confirmed Monday.

This was to be the festival’s 40th anniversary, and organizers announced the lineup for the June 19-July 1 event the day after Ottawa’s first confirmed case of COVID-19. 

The Toronto and Montreal jazz festivals had already pulled the plug because of similar restrictions in their cities, so Cancura said the writing was on the wall.

“We have a few contingency plans to keep connecting with our audience and working with our artists,” Cancura said.

People holding tickets to the 2020 festival can ask for a refund or exchange for a 2021 pass.

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