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Wall Street Journal / Tech

Prime Perks: Amazon Dangles Discounts for Whole Foods Shoppers

Amazon.com is offering new discounts for Prime members shopping at its Whole Foods grocery stores, adding another perk to its membership program after a 20% price hike.

Amazon is offering Whole Foods discounts to make Prime more appetizing.

Amazon.com Inc. AMZN -0.47% is offering new discounts for Prime members shopping at its Whole Foods grocery stores, adding another perk to its membership program after a 20% price hike.

The online retail giant said it would knock 10% off already discounted items and each week cut prices on other products throughout the store. This week’s deals, for example, include half off wild-caught halibut, buy-one, get-one free 12-pack case of sparkling water and $2.99 for a pound of organic strawberries.

The new deals are available immediately at Florida stores and will be rolling out to its more than 460 stores nationwide this summer. Cem Sibay, vice president of Amazon Prime, said the 10% discount will apply to hundreds or even thousands of already discounted items in each store, while the weekly rotation of deals will typically number in the single digits.

“It’ll be a good mix of produce, meats and seafood,” he said.

The discounts come as analysts estimate Prime’s growth rate may be slowing. Amazon for the first time last month revealed it has over 100 million Prime members world-wide. Still, analysts think the company has largely saturated wealthier U.S. households, triggering the company to look for additional growth for the program elsewhere.

Adding more discounts at Whole Foods could make the Prime program worthwhile for some shoppers and keep them in the fold, as well as draw in some of the roughly 40% of shoppers who aren’t yet members, according to Morgan Stanley. Analysts at the bank say grocery discounts “can go a long way toward justifying Prime membership…even at $120 a year.”

Amazon increased the annual price of Prime last month for only the second time. The program, which includes unlimited two-day shipping and video content, started off at $79 annually in 2005. Executives attributed this year’s price hike to the cost of delivering the program as it adds to the offerings.

Prime consists of a bundle of benefits, Mr. Sibay said. “So no one benefit really drives a price increase.”

Amazon also recently added a new option to get in-car delivery for Prime members and began offering a Prime Book Box that delivers a curated subscription of children’s books at a discount.

Amazon has also widened the scope of Prime to low-income consumers by adding programs costing $5.99 a month for those who obtain government assistance with cards typically used for the food-stamp program and Medicaid assistance.

To get the new Whole Foods discounts, Amazon said Prime customers can sign in to either scan a bar code generated by the grocer’s app or enter their phone number to qualify for the discounts. Prime customers with Amazon reward credit cards qualify for an additional 5% off via cash back.

The Whole Foods Prime discounts are the latest in a round of changes announced by Amazon since its August acquisition of the grocery chain. It has also added one- and two-hour delivery in some markets, slashed some prices, added lockers to most stores and introduced Whole Foods’ private label foods to its own website.

Corrections & Amplifications
Amazon.com Inc. introduced Prime in 2005 for $79 annually. An earlier version of this article incorrectly said that the service was introduced in 1995 for $75 annually. (May 16, 2018)

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