- Whole Foods saw a 16.5% increase in foot traffic in Q1 2019 compared to the first quarter of 2018, according to a new report from inMarket. The increase may be attributed to incentives for Amazon’s 90 million Prime members. The number of new shoppers for the same period dropped 2.5%.
- The length of store visits is also down. Micro visits, shopping trips that last less than five minutes, increased by 10% in Q1 this year, which could be attributed to the increase in Amazon Lockers at Whole Foods locations and online order pickups. Customers who are shopping in-store are also spending less time there.
- Whole Foods shoppers tend to buy brands that are fresh and organic versus dry or packaged goods. The report found that brands such as Organic Valley, Organic Girl, Chobani, Kevita and Driscoll’s had the highest volume growth in Q1 2019.
Online grocery shopping is rapidly growing, and it's causing a shift in consumer traffic and shopping patterns. A Coresight Research survey released this week found that nearly 37% of U.S. shoppers have purchased their groceries online in the past year, up from 23% the prior year. Amazon is dominant in the space, with 62.5% of shoppers purchasing groceries online from the retailer in the past year. Prime memberships are a big part of the company's success in driving grocery sales.
Despite those numbers, only 2.2% of U.S. food and beverage sales were online in 2018. For Amazon to grow in grocery, a brick-and-mortar presence has to be part of its business. Although plans for a new chain are in the works, Whole Foods is currently Amazon's primary source of physical grocery stores.
Pricing continues to stand in the way for Whole Foods, however. The grocer has the highest overall prices among grocers, and prices are considerably higher than Amazon's closest online competitor, Walmart. According to new research from Bank of America Merrill Lynch, a Whole Foods basket is priced at a 39% premium to Walmart.
Last month, Amazon announced price cuts on hundreds of Whole Foods products — its third round of cuts since acquiring the grocer. Prime members will get additional discounts, another effort to beef up its membership base. If Amazon can keep Whole Foods' prices competitive with other retailers, something that has been a challenge since the 2017 acquisition, it could inspire more customer loyalty, drive bigger baskets and lead to longer shopping trips.
There hasn't been enough time to gauge whether or not these price cuts are drawing more shoppers to Whole Foods, but they may have some effect in the coming months, along with any other strategic moves Amazon has in the works for Whole Foods.