Grocery stocks were hammered after Amazon cut prices at Whole Foods last year.
But one year after the acquisition, there has been only a minimal decline in grocery prices in the US.
Grocery prices fell 0.3% in the 12 months ending in June, compared to a 0.6% increase over the same period last year, according to data from Adobe Analytics.
Amazon is at least partially responsible for the decline, according to Siddharth Kulkarni, a data science manager and analyst for Adobe Digital Insights.
“Amazon is having downward pressure on pricing when it comes to groceries,” Kulkarni said.
But the deal hasn’t ignited an all-out price war in the grocery industry — at least not yet.
That could change now that Amazon has introduced new discounts for members of its Prime membership program at Whole Foods stores across the US.
The discounts include 10% off sale items at Whole Foods and weekly promotions on best-selling items.
But the bigger threats to the grocery industry are discount grocers Aldi and Lidl, according to some analysts.
According to one study, supermarkets in close proximity to Lidl drop prices by as much as 55% to compete with the discount grocer.
“If it’s death by a thousand cuts, Aldi and Lidl are holding the blade,” Mike Paglia, a grocery analyst at the research firm Kantar Retail, told Bloomberg.
Source: Business Insider