Whole Foods raises prices after highly-publicized cuts

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Amazon has been trying hard to remake Whole Foods’s “Whole Paycheck” image, but facing rising costs, the premium grocery chain has increased prices on a number of items.

Whole Foods has raised prices on hundreds of items in the past three months, according to internal communications reviewed by Yahoo Finance. The price hike, first reported by the Wall Street Journal on Tuesday, took effect on a wide range of products in December and February, including Back to Nature boxed cereals and body care products. Whole Foods cited inflation as the major reason for the hikes.

The increase ranges from 10 cents to several dollars, according to the WSJ. Some product categories, like soap, detergent, and oils saw higher increases. Whole Foods said customers would on average see net price increases on fewer than 50 items out of 11,000 products in stores. An average Whole Foods store carries about 35,000 stock keeping units (SKU) in 2015, according to executives.

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The price hikes come 18 months after Amazon acquired Whole Foods. On the first day it owned the grocery chain, Amazon cut prices on a number of popular items such as avocados and blueberries, generating buzz among shoppers and grocers. It offered even more in-store deals to Amazon Prime members, who can enjoy weekly discounts on a variety of items. The move to cut prices also pushed Whole Foods to stop the expansion of its 365 stores, Yahoo Finance reported last month.

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“I think the focus has moved away from price because they just know at the moment is probably not a battle that they want to fight,” said Neil Saunders, managing director of retail at GlobalData. “It would mean that they have to reduce margin, they have to probably make a loss initially. And I think what they want to do now is to ramp up volume, open more stores, try for more ecommerce, things that drive efficiency and improve economies of scale.”

Whole Foods groceries are still much more pricey than Walmart.
Whole Foods groceries are still much more pricey than Walmart.



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