As Whole Foods Market continues to slash prices at its stores, the chain is attracting competitors’ shoppers — including those from Walmart. This was according to “Competitive Impact of Lower Prices at Whole Foods,” a report from data intelligence firm Thasos Group.
Immediately following Amazon’s acquisition of Whole Foods in August, the natural foods grocer has significantly dropped prices on merchandise storewide. This effort has increased foot traffic by 17% year-over -year during the week of the price reductions, which began on Aug. 28.
Walmart’s regular customers accounted for the largest percentage (24%) of Whole Foods’ new customers the week of Aug. 28. Kroger (16%), Costco (15%) and Target (11%) comprised the next largest numbers of new customers. When it comes to customer defections, Trader Joe’s saw the highest rate, with an average loss of nearly 10% daily customers. This was followed by Sprouts (8%) and Target (3%), the study revealed.
Whole Foods’ new customers overwhelmingly belonged to the same upper income demographic as the company’s traditional customer base. Furthermore, defecting customers came from the wealthiest segment of each competing store’s customer base the week of the price cuts. The price reductions were too insufficient to attract new kinds of customers, as new customer demographics (including income levels and distance driven to a given store) largely matched those of existing customers. (CSA)