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Looking to expand their foothold in the brick-and-mortar grocery store industry, Amazon purchased Whole Foods earlier this year for a whopping $13.7 billion. The deal closed today and Amazon isn't wasting any time implementing changes.
According to pricing data collected by Bloomberg from before and after the acquisition, many products around the store had their prices cut by double-digit percentages with some dropping by as much as 43 percent.
Not everything in the store was marked down though. It's clear that Amazon is picking and choosing the markets they want to compete in. The supermarket industry is valued at roughly $800 billion so there is plenty of room for Amazon to grow. Their largest current competitors are Walmart, Kroger and Costco.
Traditionally, Whole Foods (nicknamed "Whole Paycheck" by some) has been known for their high prices and boutique selections. These price drops show Amazon is serious about bringing the store into competition with the big players.
According to industry research, the largest barrier to Whole Foods' customers was price. Amazon believes that if they can invest in and subsidize certain categories, they can dominate the market and cause widespread change across the industry.
In addition to these price drops, Amazon has also began selling its Echo smart speaker at select Whole Foods stores with deep discounts. Traditionally retailing for $179.99, the Echo is available for just $99.99 with the Echo Dot commanding $44.99.