SoylentNews is people
SoylentNews
Amazon.com Inc. spent its first day as the owner of a brick-and-mortar grocery chain cutting prices at Whole Foods Market as much as 43 percent.
...
The tech giant's $13.7 billion purchase of Whole Foods has sent shock waves through the already changing $800 billion supermarket industry. The wedding between Amazon and the upscale grocery promises to upend the way customers shop for groceries. Cutting prices at the chain with such an entrenched reputation for high cost that its nickname is Whole Paycheck is a sign that Amazon is serious about taking on competitors such as Wal-Mart Stores Inc., Kroger Co. and Costco Wholesale Corp."Price was the largest barrier to Whole Foods' customers," said Mark Baum, a senior vice president at the Food Marketing Institute, an industry group. "Amazon has demonstrated that it is willing to invest to dominate the categories that it decides to compete in. Food retailers of all sizes need to look really hard at their pricing strategies, and maybe find some funding sources to build a war chest."
"Whole Paycheck" is now "Half Paycheck."
(Score: 0) by Anonymous Coward on Wednesday August 30 2017, @08:43AM (1 child)
Actually they will probably not do a zero profit. Instead they will cut down just enough goods to get people hooked, but still make some profit at the other goods.
For example, imagine they sell apples, bananas and cherries. Then they can lower the apple and banana prices to zero-profit, while keeping the cherry prices. People will go there for apples and bananas, but will also buy the cherries there, since after all, they are already at that shop. Indeed, they might even increase their profit if the sales of non-lowered goods go sufficiently up if enough people coming for the lowered goods will also buy some non-lowered goods which otherwise they would have bought elsewhere.
(Score: 2, Touché) by Anonymous Coward on Wednesday August 30 2017, @01:01PM
wow. you just invented a "loss leader"