Amazon’s widely reported price cuts at its newly acquired Whole Foods unit appear to be driving foot traffic to the store—and away from some competitors.
A study by data intelligence firm Thasos found that foot traffic to Whole Foods rose in the wake of the acquisition and price reductions. It also found that the closer a retailer was to a Whole Foods, the more likely it was to lose shoppers to the chain.
Specialty grocery retailer Trader Joe’s and organic grocery chain Sprouts Farmers Market saw the highest rates of decline in foot traffic in the first weeks after the acquisition and price cuts were announced.
Thasos analyzed foot traffic at Whole Foods stores as well as competitors located within a 20-mile radius of those stores, including supermarket chains, warehouse stores and mass retailers. It examined data over the course of four weeks: one week prior to the price reductions, and the three weeks immediately after.
Topline data from the study reported that average daily foot traffic to Whole Foods locations for the week ending September 3—the first week of price cuts—increased 17% vs. the same period in 2016. Not surprisingly, three weeks after the price reductions were announced, foot traffic increases had fallen back to 4% year over year.
Once their curiosity was satisfied, it seems the majority of new shoppers returned to their regular shopping habits. However, for a subset of grocery retailers—those offering a selection of fresh and ethnic foods—the data indicates heightened competition.