Just days after the Fed’s preferred inflation gauge disappointed once again in its reading for January, Amazon has handed Jerome Powell another excuse to keep interest rates on hold – or maybe even, as investors keep insisting, consider a cut.
Not long after it reported that Amazon’s Whole Foods would be raising prices on certain items at the insistence of vendors, who are struggling with higher transportation costs, the Wall Street Journal has returned with another Amazon “scoop”, this time reporting the exact opposite: The grocer once derided as “Whole Paycheck” will be cutting prices on hundreds of items in what WSJ described as “some of the broadest [price cuts] since Amazon bought Whole Foods for nearly $14 billion in 2017.” Citing internal WF documents, WSJ said the cuts would be implemented on Wednesday at the 480 stores, as competition between grocery chains heats up.
The average discount was reportedly around 20%.
Prices on more than 500 items, with more being added, are set to drop at Whole Foods stores across the U.S. on Wednesday, according to documents viewed by The Wall Street Journal. The products range from sliced salami to popcorn to cod fillets.
The cuts are some of the broadest since Amazon bought Whole Foods for nearly $14 billion in 2017, spanning many product categories across the supermarket. The e-commerce giant has tried to extend its own reputation for low prices and convenience to Whole Foods, to counter a sense among some consumers that shopping there required a “Whole Paycheck.”
Whole Foods is cutting as Wal Mart and Kroger have insisted on keeping prices low to try and hang on to their share of the $1 trillion market for groceries in the US. Kroger shares tumbled during the last hour of the trading day after the Whole Foods news hit the tape.
Meanwhile, the reaction in Amazon and Wal-Mart shares was relatively muted.
Further discounts of up to 10% on sale items will be offered to Amazon Prime members. During the weeks before the cuts, the news was kept under wraps at the company to prevent leaks, with most employees at the chain’s stores unaware of the cuts. Employees will work overnight on Tuesday to change out labels on impacted products, which will include more meat and poultry items then past rounds of cuts. Notably, WF is moving ahead with the cuts as Amazon prepares to open another chain of grocery stores aimed at more middle-market shoppers.
via ZeroHedge News https://ift.tt/2I5GGPK Tyler Durden