Amazon cuts prices at Whole Foods by up to 43% on first day

[NEW YORK] Amazon.com Inc spent its first day as the owner of a brick-and-mortar grocery chain cutting prices at Whole Foods Market.

At the Whole Foods on 57th Street in Manhattan, organic fuji apples were marked down to US$1.99 a pound from US$3.49 a pound; organic avocados went to US$1.99 each from US$2.79; organic rotisserie chicken fell to US$9.99 each from US$13.99 and the price of some bananas was slashed to 49 US cents per pound from 79 US cents.

The items marked down had orange signs reading "Whole Foods + Amazon." The signs listed the old price, the new price and "More to come...".

Lori McNichol, a resident of Manhattan's Upper East Side, said she was doing her regular grocery shopping Monday morning and wasn't lured by lower prices. Still, she has high hopes for the supermarket's new owner.

"I thought I could probably get things delivered, which would be exciting," she said.

Amazon acquired the upscale supermarket chain for US$13.7 billion, sending competitors such as Kroger Co, Costco Wholesale Corp and Wal-Mart Stores Inc reeling. Whole Foods earned a reputation for high prices, getting the nickname Whole Paycheck.

The cuts add another front to a price war that's already raging across the supermarket sector. Retailers from Wal-Mart to European-based discounters look to grab shoppers' attention.

The battle has shaved profit margins and prompted companies to look at new selling strategies, like Wal-Mart's decision last week to sell its goods on Google's online marketplace.

Shares of Kroger fell as much as 2 per cent in early trading on Monday.

BLOOMBERG