Amazon.com, Inc. (NASDAQ:AMZN) began its first day of ownership of the grocery chain Whole Foods Market, Inc. by slashing prices as much as 43%. The purchase of Whole Foods, announced in June, was a shock to the supermarket industry in North America. The move to cut prices so dramatically at Whole Foods, known for its high cost geared towards upscale shoppers, demonstrates that Amazon is more than committed to competition with the other large grocery chains.
Amazon stock has fallen 5.7% in 3 months to August 30. This was the first major dip seen since the last few months of 2016. This year has seen the stock move up 28%. Other grocery retailers have responded in kind to the developments at Whole Foods. Wal-Mart Stores Inc (NYSE:WMT) have made significant investments to lower prices and have dramatically improved produce sections in stores. In its most recent quarter Wal-Mart saw the best food sales growth in years.
Direct competitor Sprouts Farmers Market Inc (NASDAQ:SFM) has fallen 16% since the original announcement of the Whole Foods purchase. On Monday it dipped below the $20 mark for the first time since early March.
Amazon stock is looking for momentum after a terrible August. It remains to be seen whether or not the company can shake up the grocer industry the same way it did with other brick-and-mortar retail, but this early shake-up has inspired a sharp response from competition.
