Prime Day Promises to Bring Pain – But Also Opportunity – to Grocers

Amazon Prime Day sales are expected to grow at least 40% this year to $3.4 billion globally, according to Coresight Research. The day-and-a-half sales event includes discounts on hundreds of products, and for the first time will include offers at Whole Foods. For supermarkets, the worry is that not only will deals divert traffic away from their stores, but that they will spur a host of new Prime members, thus strengthening the loyalty program that has become Amazon’s main leverage point since it bought Whole Foods last summer. Whole Foods stores will run deep discounts on select products along with an additional 10% off already listed sales items throughout stores. The chain will also offer 10% cash back for its Amazon Prime Rewards credit card. Meanwhile, Amazon.com will feature 30% off private label brands that include grocery offerings. So how can grocers combat this sales coup for the online giant? It turns out the best policy may be to ride the wave. Could grocery stores see a similar uptick in sales if they run competing discounts? Retailers may be reluctant to go toe-to-toe with Amazon, but sitting on the sidelines may be the worst thing a company can do.
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