Monday, October 9, 2017

Whole Foods Gaining Customers At The Expense of Competition

Whole Foods
The newly acquired high-end grocer Whole Foods is already poaching new customers from Walmart and other competitors. This resulted after new owners, Amazon, decided to cut prices, according to a report from Thasos Group, a data intelligence firm founded at MIT.

Beginning 28 August, Whole Foods, which had earned the nickname "Whole Paycheck," slashed prices on some of its best-selling staple items, including avocados, bananas, organic brown eggs, Fuji and Gala apples, almond butter, and farm-raised salmon and tilapia.

Whole Foods immediately experienced a 17 percent increase in foot traffic year-over-year for the week beginning 28 August, the Thasos report found.

Of that foot traffic, new customers came primarily from Walmart, accounting for 24 percent of the new shoppers that week, while Kroger shoppers accounted for 16 percent and Costco customers for 15 percent.

Some of the Whole Foods' other competitors also saw significant defections during that time. Nearly 10 percent of Trader Joe's daily customers shopped at Whole Foods during the first week of price cuts, while 8 percent of Sprouts and 3 percent of Target customers did so.

Traffic has since subsided from its initial spike but remained at elevated levels of 4 percent year-over-year as of the week ending 16 September.

The profile of the Whole Foods' customer didn't change. Most of the shoppers were the wealthiest regular customers at the other stores, the report noted.

Thasos uses real-time location data from mobile phones for its reports.

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