According to news from The Wall Street Journal, this is one of the first infusions of cash the eCommerce giant has delivered to Whole Foods through its website.
Amazon completed $500,000 in online grocery sales in the first week after it started offering Whole Foods’ “365 Everyday Value” products, according to One Click Retail eCommerce data. Weekly sales fell to about $300,000 during the next two weeks after the site ran low on some products, but rebounded in the fourth week.
“This is probably one of the most valuable things they got from Whole Foods,” said Diana Sheehan, director of Retail Insights at the Kantar Retail consultancy. “The 365 [Everyday Value] private label has probably some of the strongest brand equity in the nation.”
During the past month, 19 percent of Whole Foods online grocery sales on Amazon were of snacks and candy, followed by frozen fruit and vegetables. Deli turkey breast and coconut water were the most popular individual items, while condiments and health and beauty items drew the least share of sales.
Whole Foods’ products already had a loyal following among customers of its 470 stores, with exclusive grocery products accounting for 15 percent of the company’s annual revenue. But with Amazon’s acquisition, the Whole Foods brand will gain exposure on a mass-market platform, providing new revenue to the struggling retailer.
“When they blow it out, it’ll be a much bigger number,” said Bob Goldin, partner for the Pentallect, Inc. food consultancy.
The online private label sales are among the changes Amazon made since taking over, as well as permanently reducing prices on eggs, milk, bananas and other high volume retail items across stores.
Whole Foods stores nationally saw a 10 percent increase in foot traffic in August, but that is projected to be 4 percent below average in September. This proves Amazon will have to take additional steps to turn around Whole Foods’ two years of steady sales declines.
Amazon and Whole Foods executives have said they plan to institute more discount offers in the months to come.