Amazon.com Inc. (AMZN) and Whole Foods Market have no intention of sitting out the grocery price war.
On Wednesday, Whole Foods unveiled exclusive discounts for Amazon Prime members, including 10% off sale items and weekly discounts on select best-selling items, such as $10 per pound off wild-caught halibut steaks.
The program is now available in Florida and is set to be rolled out to other Whole Foods stores across the nation in the summer. Prime members will be asked to scan a code or use their phone numbers at checkouts to receive the discounts.
The discounting strategy represents the latest in a string of moves made to lure more shoppers to Whole Foods. Amazon, which merged with the grocer for $13.7 billion last summer, has already announced free two-hour delivery from Whole Foods stores for its Prime members in a bid to steal market share away from Walmart Inc. (WMT) and Kroger Co. (KR), the two companies that currently dominate the $800 billion U.S. grocery industry. (See also: Amazon Will Now Deliver Whole Foods Groceries in 2 Hours.)
In a statement, Whole Foods co-founder and CEO John Mackey described the latest initiative as an “amazing opportunity” to sell to more customers at a better price. Mackey previously told Reuters that Whole Foods, which has a roughly 1% share of the fragmented U.S. grocery market, has already seen its basket size — the number of items purchased per transaction — rise since it merged with Amazon last summer.
Mackey added in the interview that Whole Foods plans to “become more and more and more competitive.”
Analysts at Morgan Stanley predicted that the latest perks could make Whole Foods cheaper than conventional grocers for roughly 8 million Amazon Prime subscribers, according to Reuters.
To counter the growing threat from Whole Foods and German discounters Aldi and Lidl, Walmart has pledged to continue offering low prices to shoppers at its 5,000-plus U.S. stores.
Meanwhile, Kroger is using shopper data to personalize loyalty discounts. CEO Rodney McMullen told Reuters earlier this month that he is confident that Kroger will continue to offer lower prices than Whole Foods on a typical shopper’s basket of about 50 items per week.