Beware of Whole Foods Price Increases Following Early Amazon Discounts

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Walmart shoppers accounted for 24 percent of Whole Foods' new customers in the first week, but accounted for less than 1 percent of its new customers by the third week.

Bargain shoppers everywhere let out a collective sigh of relief when Whole Foods announced that the company would be cutting prices after being acquired by Amazon.

Customers appear to be sticking around after the price cut. Over 40 stores of Whole Foods sell beer on the tap.

A week later, traffic was running 17% higher year on year - and by the week ending 16th September, traffic remained up 4%, Reuters reported.

Customers' credit card information was accessed without authorization at eight Whole Foods stores in D.C., Maryland and Virginia, part of a security breach that affected 56 stores around the country, the grocery company said.

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Three other stores saw big defection rates for their total customer base: Trader Joe's (10 percent), Sprouts (8 percent) and Target (3 percent), according to the report.

After Amazon purchased Whole Foods, its price slashing strategy, from fresh fish to produce, led to an increase of customers "stolen" from its competitors.

Whole Foods experienced a more than 25 percent jump in national foot traffic in the first two days after the price cuts went into effect, according to Foursquare, which analyzes the movements of more than 2.5 million Americans in its foot traffic panel. The company added that since Amazon.com systems don't have connections to the Whole Foods systems, transactions on Amazon.com have not tampered.

Only ten percent of those visiting Whole Foods in the first week said they usually shop at Trader Joe's, while eight percent said they shop at Sprouts, an organic-food chain primarily located in the Southwest and West. The analysis by research firm Gordon Haskett measured prices between August 28 and September 26.

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