Amazon Declares War on Walmart and Kroger

Whole Paycheck may sound like a strange term to many people, but it means the same as whole foods. Amazon, the internet giant from the US, announced that they would slash prices of food commodities in a move to solidify themselves in a market that they have dominated in the last five years. This plan will be implemented from Monday next week and will affect several commodities such as rotisserie chickens, baby kale as well as organic avocados. This should be a warning shot to the grocery industry that has been dominated by other companies such as Kroger and Walmart. A head of retailing of a company known as Euromonitor by the name Michelle Grant said that this is one of the ways that Amazon operates. They are known for operating with speed in the last few years. In a war with his shareholders, chief executive Jeff Bezos is known for starting discount wars. He is always ready to lose money with a long term goal of outdoing their competitors. This is something that the company has embarked on in the last 23 years that they have been operational. They have embarked on a war with diaper sellers and books retailers. Now, they have resolved to war with grocery retailers.

Bob Hetu who is a Gartner analyst said that Amazon is letting other competitors know that they are on the market. The announcement by Amazon caused Walmart’s share to drop by two percent. As for Kroger, the company’s share dropped by eight percent on Thursday. Amazon will make this plan a reality by changing the Prime membership program to the While Foods rewards program. This is a new subscription that will cost customers only $99 per year. On their part, they will receive free shipping for products they buy. They will also have a free video streaming service under this program. An executive from Amazon known as Jeff Wilke said that the company is on a mission of making sure that people access organic and healthy foods. However, it’s important to note that people prefer Amazon to other companies for many reasons. Amazon is known for its convenience and selection. In the past, Amazon has challenged Barnes & Noble on books prices. Amazon has recently declared war with Walmart concerning prices of several products. We have also seen the pressure that Amazon can put on start-up companies challenging their model. Quidsi, the diaper producing company, is a good example.