Amazon has linked its Prime program with its first batch of Whole Foods Market stores, offering members of the shoppers' program a 10 percent discount on sale items and other deals on select grocery items.
The discount program is starting in Florida this week and will roll out nationwide this summer, the company said Tuesday night. Nearly immediately following the acquisition, it began slashing prices in Whole Foods' stores.
Amazon said last month that it had more than 100 million paid Prime members worldwide.
Sucharita Kodali, an analyst at Forrester Research, said the discounts were likely to hurt the profit margins at Whole Foods - but that was besides the point if the move strengthens Prime, a major focus of Amazon these days. "What we've seen is when we do special deals for Prime members, we get a lot of traffic".
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Amazon appears set to open its second and third queue free grocery stores in Chicago and San Francisco, a sign that the e-commerce giant is ready to start scaling up its wildly successful supermarket concept. But turning its Prime membership into the Whole Foods loyalty program could drive more people to its stores.
It's the latest effort by Amazon to make Whole Foods more affordable, attempting to shed the grocer's "Whole Paycheck" reputation.
Previous year the Seattle-based business purchased grocery giant Whole Foods in the U.S. to supercharge its efforts in the category, but it appears the Go concept is being kept separate from that investment. Amazon wouldn't say if it plans to add the benefits to Whole Foods stores in Canada and the United Kingdom.
And the stores themselves are serving as the brick-and-mortar presence for Amazon's online store, with things like Amazon Lockers, support for returns, and the ability to shop Amazon hardware, like Echo speakers and Fire TV. Amazon cut prices on many items at Whole Foods upon completing the acquisition previous year, as part of its broader push into physical retail stores. The app will also give customers exclusive deals and highlight the week's best offers.