Whole Foods offering lower prices
Since the acquisition of Whole Foods in August 2017, Amazon (AMZN) has been offering its customers lower prices and exclusive deals on the store’s natural and organic foods. It’s also offering hundreds of items at attractive prices for all customers both in the store and online, as well as extra benefits for other items for Amazon Prime members.
Customers have made Whole Foods Market’s 365 Every Day Value the number-one brand on AmazonFresh and Prime Now.
Customers benefiting from cost-savings and home delivery
According to Amazon, better prices through Prime Now or in Whole Foods Market stores have already saved customers millions of dollars. Prime Now members can also take advantage of fast grocery delivery in dozens of cities and curbside pickup in select cities. Two-hour home delivery is free, and one-hour delivery is $7.99.
Rising operating expenses
While customers are getting cost benefits, Amazon’s expenses are on the rise. Its shipping costs are $6 billion, up 31% from the previous year. The increase in shipping costs pushed up Amazon’s operating expenses 33.8% YoY (year-over-year) to $49.9 billion in the second quarter.
In comparison, operating expenses increased 14.3% for eBay (EBAY) in that period. Costco (COST) and Target (TGT) saw their operating expenses rise 12.2% and 4.5% YoY, respectively, in their most recent quarters.