Supermarket News Interview: Amazon may face limits in cutting Whole Foods’ prices

Michael Movitz was interviewed by Supermarket News about pricing outlook related to the Amazon/Whole Foods deal.

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Article by Mark Hamstra  | Aug 08 2017

​The structure of the natural products industry could limit how much Amazon is actually able to reduce prices at Whole Foods, as many observers believe it will try to do once its pending $13.7 billion acquisition is finalized.

While the price differential between natural/organic and mainstream products has been narrowing, and many retailers, including Whole Foods, have expanded lower-cost private label lines, the lifeblood of the industry remains many of the smaller producers that operate with high standards and production costs.

The acquisition might provide Amazon with new insights about these cost structures, said Michael Movitz, founder and managing partner at The Movitz Group, a Lincolnshire, Ill.-based consulting firm.

“This industry philosophically operates on standards, so there are lines that won’t be crossed,” he said. “There are probably learnings that Amazon will gain — at some point you have to value the product and the stakeholders in bringing the product to market.”

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