What's In Store

Amazon is already heating up Charlotte’s grocery competition

On the same day Amazon.com officially bought grocer Whole Foods, the retail giant Monday began lowering prices on a number of grocery staples, including cereal, vegetables, beef and fruit at its SouthPark store.

On Monday morning, I stopped by the Fairview Road location, where customers were greeted with a huge green Whole Foods-Amazon banner that boasts: “We’re growing something good.”

The store didn’t feel any busier than normal, and without the subtle Amazon logos on dozens of the new orange tags designating new lower prices, you might not realize that Whole Foods has a new owner. Amazon’s shocking $13.7 billion takeover of the upscale grocer will increase competition in fast-growing markets like Charlotte, thanks to lower prices and new technology, experts say.

Whole Foods – with Charlotte-area stores in SouthPark, Huntersville, Waverly and one under construction in uptown – had said it planned to lower prices starting Monday, but hasn’t said how many items saw their prices drop.

Already, cage-free brown grade A eggs at the SouthPark store were marked down to $2.99 from $3.29 Monday. Hass avocados are now $1.49, down from $2 each. Organic Fuji apples are marked down to $1.99 from $2.99 a pound, and bananas are now 49 cents, down from 79 cents a pound. A 16-oz. jar of crunchy almond butter is now $6.99, down from $7.99. A 12-oz. box of Cheerios is $2.99, a dollar cheaper than before. A 12-oz. bag of organic shredded cheddar cheese is now $6.99, marked down from $7.99.

A cashier at the SouthPark location said Monday morning that the new pricing hasn’t prompted heavier traffic than usual, but she guessed that might change as Amazon continues to lower prices.

Price cuts were the first thing supermarket analyst Phil Lempert had anticipated Amazon would do at Whole Foods, in an effort to ditch the supermarket’s image that it takes a “Whole Paycheck” to shop at the upscale grocer. He didn’t think Amazon would cut prices this quickly, though.

“That’s been the biggest boondoggle around Whole Food’s neck for years,” Lempert said of the supermarket’s high-price reputation. “(Price cuts) are the low-hanging fruit for them.”

Amazon executives said last week that the goal is to make healthy and organic food “affordable for everyone.” That will mean “significant price decreases” on more items to come, Lempert said.

Amazon has also said it will use Whole Foods stores to provide benefits to Prime members, such as lockers for order pickups. Whole Foods’ private label brands, such as 365, will be available through Amazon. Lempert says he expects Amazon will incorporate new technology at Whole Foods, too, such as new delivery options.

Elsewhere throughout Charlotte, grocery competition is already intense. Florida-based Publix has been expanding its local footprint, for instance. Kroger lowered prices on thousands of items at Harris Teeter when it acquired the chain in 2014, and it has been building new stores and expanding existing ones since. Food Lion wrapped up a $215 million renovation project of its 142 supermarkets in the Charlotte area late last year, and German grocer Lidl is preparing to open its first stores in the Charlotte region soon.

Katherine Peralta: 704-358-5079, @katieperalta