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Low prices are not the main draw with Whole Foods, he said, referencing “Whole Paycheck” - the label frequently attached to Whole Foods. Fresh stores are “leaning toward price as an appeal” for customers, he said. Many of the stores are in vacated former retail sites, a cheaper option than building a new store from the ground up, according to Bishop.Īmazon’s “goal is to build a substantial base of digitally-connected customers, and they are not going to build that base off Whole Foods because it’s a niche business,” he said. Most of the stores are slightly smaller than traditional Whole Foods stores and are located in densely-populated suburban markets, according to Bill Bishop, an analyst at consulting firm Brick Meets Click. (AMZN), so far, has opened Fresh stores in California and Illinois. It is targeted at lower and middle-income shoppers who don’t frequent Whole Foods, as well as higher-income customers hunting for deals, say analysts.Īmazon “wanted to open up something that would have broader appeal and be able to carry all those conventional products that aren’t going to be at Whole Foods,” Mushkin said. Whole Foods “doesn’t really talk to the middle of the market,” said Scott Mushkin, CEO of retail consulting and research firm R5 Capital.Īmazon’s new Fresh concept has lower prices than Whole Foods and a wider selection of mainstream brands.

Paul Bersebach/MediaNews Group/Orange County Register/Getty Images It doesn’t carry national brands like Coca-Cola, Tide and Oreo.Īmazon is ramping up openings of Amazon Fresh brick-and-mortar grocery stores. Whole Foods, which has around 500 US stores, primarily appeals to wealthier shoppers and specializes in natural and organic products.

It also wants to attract new sign-ups.Īmazon is building Fresh stores to chase a different clientele than Whole Foods’ well-defined customer base, analysts say. Amazon hopes that Fresh stores will help the company gain more of Amazon Prime members’ spending on groceries, thereby increasing loyalty to the subscription program. The online retailer isn’t just making those moves because it wants a bigger chunk of the US grocery business. Grocery analysts expect that the company will add more beyond that.

It will open a 12th Thursday in Long Beach, California, and Amazon says it has plans to open an additional four stores, although it has not given a timetable. Amazon has opened 11 Fresh locations around the United States over the past year. Instead, Amazon is ramping up openings of Amazon Fresh grocery stores. But this time, Whole Foods isn’t the focus of the strategy. Four years after Amazon bought Whole Foods, the e-commerce giant is making another major push to sell shoppers groceries.